tiprankstipranks
Trending News
More News >
Lottery Corporation Limited (AU:TLC)
ASX:TLC

Lottery Corporation Limited (TLC) AI Stock Analysis

Compare
64 Followers

Top Page

AU:TLC

Lottery Corporation Limited

(Sydney:TLC)

Select Model
Select Model
Select Model
Neutral 62 (OpenAI - 5.2)
Rating:62Neutral
Price Target:
AU$5.50
▼(-0.18% Downside)
Action:ReiteratedDate:02/18/26
The score is driven primarily by mixed financial performance—strong cash generation offsets balance-sheet leverage and weaker revenue/profit trends. Technicals are neutral-to-soft with the share trading below key moving averages, while valuation looks rich on P/E despite a moderate yield. Earnings commentary was steady with reiterated guidance, but jackpot volatility and regulatory/licence risks remain meaningful near-term headwinds.
Positive Factors
Strong free cash flow
Consistent, strong free cash flow and high cash conversion provide durable funding for dividends, capex and strategic initiatives. This reduces reliance on external financing, supports shareholder returns and gives flexibility to weather jackpot volatility or fund digital investment without eroding liquidity.
High digital penetration
A >40% digital turnover mix is a structural advantage: digital channels scale with lower retail costs, improve margins, enable targeted marketing and data-led product evolution. Persistent digital adoption supports sustainable unit economics and reduces revenue sensitivity to retail footfall or retailer commission pressure.
Diversified product resilience
Stable EBITDA and outperformance across Keno and Instant Scratch‑Its demonstrate product diversification cushions jackpot-driven swings. Successful price/offer changes and consistent margins across games underpin recurring profitability and make earnings less dependent on any single jackpot cycle over time.
Negative Factors
High leverage and low equity ratio
Significant leverage raises refinancing and interest-rate exposure risks and limits strategic optionality. With constrained equity buffers, adverse jackpot cycles or regulatory costs could force tougher capital allocation choices, potentially pressuring dividends, M&A capacity or investment pacing over the medium term.
Falling active customers
A declining active base signals weaker customer engagement and raises the cost of reactivation. If lapses persist beyond jackpot cycles, growth and organic sales recovery could slow, requiring higher marketing spend or promotions to restore participation and compressing long-term margin sustainability.
Regulatory & licence uncertainty
Licence expiries and regulatory distortions are long‑dated structural risks that can alter market access, product economics or competitive dynamics. Potential licence renegotiation or policy shifts could increase costs, limit exclusivity or invite new entrants, materially affecting revenue and long-term margins.

Lottery Corporation Limited (TLC) vs. iShares MSCI Australia ETF (EWA)

Lottery Corporation Limited Business Overview & Revenue Model

Company DescriptionThe Lottery Corporation Limited engages in lottery and keno businesses in Australia. It operates under The Lott and Keno brand names. The company operates through a network of approximately 7,200 retail points, as well as digitally. The Lottery Corporation Limited was formerly known as Tattersall's Holdings Limited. The company was founded in 1881 and is based in Brisbane, Australia.
How the Company Makes MoneyTLC primarily generates revenue through the sale of lottery tickets and game entries. The company operates a diverse portfolio of lottery games, which includes both physical and digital formats, allowing it to cater to a broad audience. A significant portion of its revenue comes from ticket sales during high-profile draws, where jackpots can reach substantial amounts, attracting more players. In addition, TLC earns money through various partnerships with retailers, where a percentage of sales is shared. The company also engages in promotional campaigns and collaborations with brands to enhance player engagement, further boosting ticket sales. Additionally, TLC benefits from a portion of the proceeds allocated to state and community programs, which helps maintain its public goodwill and supports its operational funding.

Lottery Corporation Limited Earnings Call Summary

Earnings Call Date:Feb 17, 2026
(Q2-2026)
|
% Change Since: |
Next Earnings Date:Aug 25, 2026
Earnings Call Sentiment Positive
The call portrayed a broadly resilient business that delivered solid financial outcomes despite the weakest jackpot environment since listing. Key positives include stable revenue ($1.8bn), EBITDA resilience ($367m, down 0.7%), maintained dividend ($0.08 fully franked), strong digital traction (41.2% digital lottery turnover), Keno and Instant Scratch‑Its outperformance, and a healthy balance sheet with $560m liquidity. Offsetting these are significant short-term headwinds driven by jackpot variability (circa $400m turnover impact and ~$26m EBITDA drag), a fall in active customers to 8.6m, Powerball softness, and ongoing regulatory/license risks. Overall, management emphasized strategic opportunities in digital, product refreshes (Saturday Lotto, Set for Life) and disciplined capital allocation to drive growth and smooth volatility over time.
Q2-2026 Updates
Positive Updates
Resilient Revenue Base
Group revenue of $1.8 billion in H1 FY26, demonstrating diversification across games and channels that cushioned jackpot variability.
Stable EBITDA and Profitability
EBITDA of $367 million, down only 0.7% year-on-year, and net profit after tax down 1.4%, reflecting limited earnings deterioration despite adverse jackpot conditions.
Maintained Dividend and Strong Cash Flow
Interim fully franked dividend of $0.08 per share maintained in line with prior period; dividend represents 103% of H1 net profit, supported by strong free cash flow generation.
Digital Traction
Digital share of lottery turnover grew to 41.2% in the half and digital turnover continued to increase, reinforcing digital penetration as a structural margin driver and long-term opportunity.
Keno and Instant Scratch‑Its Outperformance
Keno delivered a record half with retail turnover up 7% and online Keno turnover up 3.5%; Instant Scratch‑Its sales grew 8.5% year-on-year in key gifting periods.
Successful Saturday Lotto Refresh
Saturday Lotto $6 million Division 1 offer and price increase showed high early acceptance with price retention of 103% after 29 weeks, delivering incremental revenue per draw.
Strong Balance Sheet and Liquidity
Net debt-to-EBITDA at ~3x (bottom end of target range), $560 million available liquidity, ~4.5-year average debt tenor, and ~85% of debt fixed/hedged, preserving optionality for disciplined investment or shareholder returns.
Disciplined Cost and Capital Framework
Operating expenses grew 2.9% (OpEx H1 $146 million) with FY26 OpEx guidance of $310–$320 million; CapEx of $34 million in H1 with FY26 target $90–$100 million to support digital transformation and retail upgrades.
Negative Updates
Unusually Weak Jackpot Environment
H1 FY26 experienced the leanest jackpot run since listing; Division 1 offers for jackpot games were down 14% on the prior corresponding period, materially reducing participation.
Material Turnover Impact from Jackpots
Management cited approximately a $400 million unfavorable impact on turnover in H1 FY26 versus statistical norms (versus ~ $200 million unfavorable in H1 FY25), weighing on short-term top-line performance.
Jackpot-Driven Earnings Drag
Jackpot volatility adversely impacted EBITDA by approximately $26 million versus the prior period, contributing to the modest year-on-year EBITDA and net profit declines.
Active Customer Decline
Active customer numbers fell to 8.6 million in the half, with management attributing the drop predominantly to jackpot-driven lapses rather than structural churn among core registered customers.
Powerball Softness and Pricing Nuances
Powerball showed a like-for-like decline in the period; the most recent Powerball price change has a reported retention of ~61% of the 17% price increase to date, with uncertainty until jackpot frequency normalizes.
Regulatory and License Risk
Potential competitive and regulatory pressures noted: (a) major licence expiry in 2028 raises uncertainty in some jurisdictions and (b) foreign matched lottery products operating under NT rules present competitive distortion and regulatory risk.
Second‑Half Cost and Investment Phasing
OpEx and CapEx are expected to skew to H2 (advertising, technology, projects); while prudent, this will increase second-half spend and could compress near-term margins if jackpot mean reversion does not occur.
Company Guidance
Management reiterated FY26 financial guidance and priorities: H1 revenue A$1.8bn, H1 EBITDA A$367m (‑0.7%), H1 OpEx A$146m (+2.9%) and FY26 OpEx guidance A$310–320m; H1 CapEx A$34m with FY26 CapEx guidance A$90–100m (ramping in H2). Net debt/EBITDA is ~3x (bottom of 3–4x target), available liquidity A$560m, average debt tenor 4.5 years and ~85% of debt fixed/hedged; interest expense rose 2%. Management confirmed an interim fully franked dividend of A$0.08 per share (103% of H1 NPAT), noted Division 1 offers were down 14% PCP with jackpot headwinds reducing turnover by ~A$400m and EBITDA by ~A$26m, and highlighted digital share at 41.2% alongside Keno retail +7%, online Keno +3.5%, Instant Scratch‑Its +8.5% and Lucky Lotteries +60%, while reiterating the aim to keep OpEx growth below normalized revenue growth and to detail strategy at an Investor Day mid‑year.

Lottery Corporation Limited Financial Statement Overview

Summary
Mixed fundamentals: income statement shows declining revenue growth and softer net margins (IS score 70), the balance sheet is leveraged with low equity/ROE (BS score 55), while cash flow strength and conversion are a key positive (CF score 80).
Income Statement
70
Positive
The company has shown a declining revenue trend with a negative growth rate of -4.215% in the latest year, indicating potential challenges in maintaining sales momentum. However, the company maintains strong gross profit margins, suggesting effective cost management. Net profit margins have decreased, reflecting pressure on profitability. EBIT and EBITDA margins remain healthy, indicating operational efficiency.
Balance Sheet
55
Neutral
The company has a high debt-to-equity ratio, indicating significant leverage which could pose financial risks. Return on equity is low, reflecting limited profitability from shareholders' investments. The equity ratio is also low, suggesting reliance on debt financing. Overall, the balance sheet shows potential financial stability concerns.
Cash Flow
80
Positive
The company has demonstrated strong free cash flow growth, indicating improved cash generation capabilities. The operating cash flow to net income ratio is robust, suggesting good cash conversion from earnings. The free cash flow to net income ratio is also strong, highlighting efficient cash management. Overall, the cash flow position is a positive aspect of the company's financial health.
BreakdownTTMJun 2025Jun 2024Jun 2023Jun 2022Jun 2021
Income Statement
Total Revenue3.76B3.73B3.98B3.50B3.28B2.95B
Gross Profit2.81B3.73B3.07B2.74B2.65B2.36B
EBITDA744.20M763.70M788.90M608.70M586.80M498.30M
Net Income363.10M365.50M414.00M264.80M346.60M399.30M
Balance Sheet
Total Assets4.46B4.41B4.36B4.37B4.22B2.71B
Cash, Cash Equivalents and Short-Term Investments580.80M550.50M504.00M841.30M640.50M427.20M
Total Debt2.58B2.50B2.48B2.55B2.49B3.20M
Total Liabilities4.12B4.08B4.00B4.11B3.97B2.44B
Stockholders Equity339.60M321.80M363.10M264.80M242.80M272.30M
Cash Flow
Free Cash Flow528.50M470.10M424.30M376.90M600.00M287.70M
Operating Cash Flow617.10M541.70M492.80M456.50M624.40M308.90M
Investing Cash Flow-111.50M-96.00M-87.60M-121.20M-63.50M19.20M
Financing Cash Flow-417.70M-414.70M-393.80M-217.00M-456.60M-330.70M

Lottery Corporation Limited Technical Analysis

Technical Analysis Sentiment
Positive
Last Price5.51
Price Trends
50DMA
5.13
Positive
100DMA
5.26
Positive
200DMA
5.31
Positive
Market Momentum
MACD
0.10
Negative
RSI
66.73
Neutral
STOCH
61.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:TLC, the sentiment is Positive. The current price of 5.51 is above the 20-day moving average (MA) of 5.25, above the 50-day MA of 5.13, and above the 200-day MA of 5.31, indicating a bullish trend. The MACD of 0.10 indicates Negative momentum. The RSI at 66.73 is Neutral, neither overbought nor oversold. The STOCH value of 61.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:TLC.

Lottery Corporation Limited Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
AU$613.66M16.0634.17%4.84%-8.81%-6.84%
64
Neutral
AU$2.45B74.312.89%2.01%8.62%
62
Neutral
AU$12.26B33.76106.73%3.16%-6.28%-11.67%
61
Neutral
$18.38B12.79-2.54%3.03%1.52%-15.83%
49
Neutral
AU$255.45M-6.06-14.71%126.29%95.17%
45
Neutral
AU$201.65M-14.40-25.15%-10.59%32.75%
43
Neutral
AU$304.14M-13.02-142.61%6.47%60.03%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:TLC
Lottery Corporation Limited
5.51
0.74
15.59%
AU:PBH
PointsBet Holdings
0.88
-0.23
-20.45%
AU:TAH
Tabcorp Holdings Limited
1.07
0.39
57.82%
AU:BET
Betmakers Technology Group
0.18
0.08
71.43%
AU:JIN
Jumbo Interactive Limited
9.69
-1.09
-10.14%
AU:BBT
BlueBet Holdings Ltd.
0.25
-0.05
-18.33%

Lottery Corporation Limited Corporate Events

Lottery Corporation corrects performance rights records after administrative oversight
Feb 10, 2026

The Lottery Corporation Limited has adjusted its recorded performance rights following a reconciliation that identified discrepancies in movements under its long-term incentive plans. The review confirmed that 921,565 performance rights were converted to TLC securities, 167,077 rights lapsed after an employee left, and 21,219 new rights were granted under the FY24 plan.

The company attributed the delayed lodgement of these changes to an administrative oversight, stating that required notifications were submitted promptly once confirmed. TLC says it has reviewed and strengthened its internal processes and added extra controls to uphold compliance with ASX Listing Rules, aiming to reduce the risk of similar issues recurring and reassure investors about governance standards.

The most recent analyst rating on (AU:TLC) stock is a Buy with a A$5.70 price target. To see the full list of analyst forecasts on Lottery Corporation Limited stock, see the AU:TLC Stock Forecast page.

The Lottery Corporation Announces Lapse of 486,343 Performance Rights
Feb 3, 2026

The Lottery Corporation Limited has notified the market that 486,343 performance rights (ASX code TLCAA) have lapsed after the conditions attached to these rights were not met or became incapable of being satisfied, effective 30 January 2026. The lapse of these conditional securities reduces the company’s potential future share issuance under this incentive structure, which may have a modestly dilutive impact avoided for existing shareholders and reflects performance or vesting hurdles not being achieved under the relevant plan.

The most recent analyst rating on (AU:TLC) stock is a Buy with a A$5.70 price target. To see the full list of analyst forecasts on Lottery Corporation Limited stock, see the AU:TLC Stock Forecast page.

Lottery Corporation Sets February Date for Half-Year Results and Interim Dividend Timetable
Jan 13, 2026

The Lottery Corporation Limited has set 18 February 2026, prior to market open, as the date to release its half-year financial results for the six months ended 31 December 2025, followed by a results briefing webcast at 10:30am Melbourne time on the same day. The company has also outlined its indicative timetable for an interim dividend, with the ex-dividend date scheduled for 25 February 2026, the record date on 26 February 2026 and payment expected on 26 March 2026, subject to legal requirements, business performance and Board approval, providing investors with clear visibility on upcoming financial disclosures and potential capital returns.

The most recent analyst rating on (AU:TLC) stock is a Sell with a A$5.10 price target. To see the full list of analyst forecasts on Lottery Corporation Limited stock, see the AU:TLC Stock Forecast page.

Wayne Pickup Appointed as CEO of The Lottery Corporation
Dec 8, 2025

The Lottery Corporation Limited has announced the appointment of Wayne Pickup as the new Managing Director and Chief Executive. This appointment is expected to influence the company’s strategic direction and potentially impact its market operations, as Mr. Pickup holds 401,033 performance rights, indicating a significant stake in the company’s future performance.

The most recent analyst rating on (AU:TLC) stock is a Sell with a A$5.10 price target. To see the full list of analyst forecasts on Lottery Corporation Limited stock, see the AU:TLC Stock Forecast page.

Lottery Corporation Appoints Wayne Pickup as CEO
Dec 8, 2025

The Lottery Corporation has announced the appointment of Mr. Wayne Pickup as a Director, who will also assume the role of Managing Director and Chief Executive Officer. This leadership change is expected to influence the company’s strategic direction and operational management, potentially impacting its market positioning and stakeholder relations.

The most recent analyst rating on (AU:TLC) stock is a Sell with a A$5.10 price target. To see the full list of analyst forecasts on Lottery Corporation Limited stock, see the AU:TLC Stock Forecast page.

Sue van der Merwe Resigns from The Lottery Corporation Board
Nov 27, 2025

The Lottery Corporation Limited announced the resignation of Sue van der Merwe from her position as a director, effective 27 November 2025. This change in the board’s composition may impact the company’s strategic direction and stakeholder relations, as van der Merwe held significant interests in the company, including ordinary shares and performance rights.

The most recent analyst rating on (AU:TLC) stock is a Buy with a A$6.35 price target. To see the full list of analyst forecasts on Lottery Corporation Limited stock, see the AU:TLC Stock Forecast page.

The Lottery Corporation Announces New CEO Appointment
Nov 26, 2025

The Lottery Corporation Limited has announced the appointment of Wayne Pickup as the new Chief Executive Officer and observer to the Board, with plans for him to become Managing Director following administrative formalities. This leadership change follows the retirement of Sue van der Merwe as Managing Director and CEO, who will assist with the transition until January 2026. This transition marks a significant leadership shift for the company, potentially impacting its strategic direction and operations.

The most recent analyst rating on (AU:TLC) stock is a Sell with a A$5.20 price target. To see the full list of analyst forecasts on Lottery Corporation Limited stock, see the AU:TLC Stock Forecast page.

Lottery Corporation Addresses Late Lodgement of Appendix 3G
Nov 20, 2025

The Lottery Corporation Limited announced a late lodgement of Appendix 3G related to performance rights granted under its employee incentive plan for FY26. The delay was attributed to an administrative oversight, which the company has addressed, assuring stakeholders that its compliance processes are adequate and that this incident is isolated.

The most recent analyst rating on (AU:TLC) stock is a Sell with a A$5.20 price target. To see the full list of analyst forecasts on Lottery Corporation Limited stock, see the AU:TLC Stock Forecast page.

The Lottery Corporation Issues New Performance Rights
Nov 20, 2025

The Lottery Corporation Limited announced the issuance of 1,362,457 unquoted performance rights as part of an employee incentive scheme. This move is aimed at aligning employee interests with company performance, potentially impacting the company’s operational strategies and stakeholder engagement positively.

The most recent analyst rating on (AU:TLC) stock is a Sell with a A$5.20 price target. To see the full list of analyst forecasts on Lottery Corporation Limited stock, see the AU:TLC Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Feb 18, 2026