Shares of Tabcorp Holdings Limited (ASX: TAH) ended mostly flat today (up 0.4%) despite a positive third quarter market update this morning.
In an announcement to the ASX, Tabcorp said total group revenue rose 3.3% to $508.7 million during its third quarter, whilst year-to-date revenue stood at $1,623.9 million, up 5.6% over the prior corresponding period.
Wagering & Media revenue was the standout performer during the group's first nine months (climbing 7.1%) on the back of a strong first half buoyed by the Soccer World Cup. Luxbet, Trackside, TAB Sports and TAB Racing Fixed Odds each produced double-digit revenue growth.
During the third quarter revenues from Keno were 13.8% lower at $43.9 million, after a disproportionate number of jackpots were won during the period.
Pleasingly, despite strong competition, the company continues to post strong increases in turnover from digital channels, with quarterly turnover climbing to $814.8 million, up 16.8%.
Should you buy Tabcorp shares?
Over the past 12 months, Tabcorp shares have risen 31% and now trade at a relatively high valuation compared to fellow ASX-listed consumer services stocks such as Crown Resorts Ltd (ASX: CWN) and Tatts Group Limited (ASX: TTS).
Whilst Tabcorp continues to post robust top line growth, I think shares in the company are fairly valued at today's prices and are therefore probably best left on investors' watchlists until prices come back into a more compelling range.
