Genius Sports gets an Outperform rating from Macquarie
Sports betting data provider Genius Sports (NYSE: GENI ) closed slightly higher on Thursday on above-average volume after the stock received some praise from sellers.
In a new note to clients, Macquarie analyst Chad Beynon initiated an "outperform" rating on the stock, with a price target of $11, indicating a jump from Thursday's close. $6.20 has 77.4% upside potential. The analyst believes Genius Sports is "at the technological center of a strong NFL recovery."
We believe Genius Sports has been and will continue to be a key driver of sports fan engagement and sports league/team values, which have doubled over the past five years," Beynon wrote. "Due to the importance of GENI's player statistics, artificial intelligence (AI) data, and ability to bring these data to reality, we believe the value of GENI stock can also increase over the next 1-2 years." Double. "
Not surprisingly, Genius is one of the best-performing sports betting stocks this year, rising a whopping 73.67%. This includes a 16.32% increase over the previous month.
ESSENTIALS FOR GENIUS SPORTS
The data and technology provided by Genius are critical to the advancement of the domestic sports betting industry and are vital at a time when more and more operators are using exotic bets to attract customers.
Some analysts describe Genius as a "pick and shovel player," pitching live betting data and "other sticky services" to global sportsbooks, including Bet365 and DraftKings (NASDAQ: DKNG ). Some analysts believe the stock could benefit from bettors' growing preference for in-game or live betting over pre-game investing.
Given the expected growth in the North American online sports betting (OSB) market and the support of its relationship with the NFL, Genius Sports could be a long-term winner among sports betting stocks.
“We expect the North American OSB market to grow at a CAGR of 24% and reach $22 billion in gross gaming revenue (GGR) by 2026. We believe that this will be driven by increased event occupancy, new products and in-game betting , GENI's revenue in North America can grow faster. In 2021, GENI becomes the exclusive distributor of official NFL data, which is critical for gaming sales, but is expected to further drive advertising growth," Beynon added.
Weather Habits, Predictable Income Help Genius
Sportsbooks, many of whom are Genius customers, are increasingly attracting customers through in-game betting and in-game draws. These high odds and high stakes require technology, and Genius has the technology.
Thanks to bettors' growing preference for lottery-style betting, among other factors, Genius has one of the most predictable revenue streams in a gaming industry that's not typically known for its predictability.
"Given the predictability of GENI's business, we expect free cash flow to exceed $70 million in 2025 and over $120 million in 2026, with significant upside from a faster transition to NFL live betting. Generating “incremental advertising revenue” by rapidly launching new products like BetVision,” Beynon concluded.
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Source: www.casino.org
