Sports betting is enjoying explosive growth globally. Genius Sports (GENI), with its unique products, including a proprietary algorithm that identifies questionable betting activities and a robust tech infrastructure for live data collection, is poised to capitalize on the growing momentum in this sector. The company’s recent financial performance has exceeded expectations, driven by a 23.1% year-over-year sales growth rate, with projections for 2024 revenue to continue to surge by 21%.
The company displays remarkable potential in the rapidly expanding digital sports ecosystem, making it a compelling option for investors looking for exposure to this industry.
Genius Sports Cutting Edge Solutions
Genius Sports is a tech-driven company catering to the sports, sports betting, and sports media industries. It provides various solutions, including developing technology infrastructure for collecting and distributing live sports data, active monitoring technology to flag suspicious betting activity through mathematical algorithms, and a comprehensive suite of online and offline consultancy services.
The company forms a global link between sports, betting, and media industries and acts as the official data, technology, and broadcast partner. Its cutting-edge technology, including big data, computer vision, machine learning, and augmented reality, is used in over 150 countries and is valued by over 400 sports organizations worldwide, including the NFL, EPL, FIBA, NCAA, NASCAR, AFA, and Liga MX.
Moreover, Genius Sports has exclusive multi-year partnerships with the NFL, NBA, NCAA, and PGA. It has expanded its technological capabilities by acquiring Second Spectrum, a sports data and research company.
Genius Sports’ Recent Financial Results & Outlook
The company recently reported financial results for Q1 2024. Revenue was $119.72 million, exceeding analysts’ expectations of $115.84 million and marking 23% year-over-year growth. The primary growth drivers in this context were new client acquisition and contract renegotiation in the Betting Technology, Content & Services segment. They heightened activity, driving 63% year-over-year growth in the Media Technology, Content & Services segment.
Conversely, the Sports Technology & Services segment suffered a 4% decline year-over-year. However, the company experienced a downturn in earnings per share (EPS), registering -$0.11, falling short of the consensus estimates of -$0.10.
Looking forward, Genius Sports anticipates Group Revenue of about $500 million and Group Adjusted EBITDA nearing $82 million for the full year of 2024, representing year-over-year growth rates of 21% and 54%, respectively. The company also envisions achieving a positive cash flow in 2024.
What Is the Price Target for GENI Stock?
The stock has been volatile, with a beta of 1.70, though it recently broke out of range-bound trading, climbing over 18% in the past three months. It trades towards the middle of its 52-week price range of $4.62 – $8.45 and shows positive price momentum, trading above its 20-day (5.56) and 50-day (5.47) moving averages.
Analysts following the company have been bullish on the stock. For example, Needham analyst Bernie McTernan recently reiterated a Buy rating with a price target of $9.00 on shares of Genius Sports. He noted relationships with major sports leagues, such as the NFL, establishing a robust foundation in the lucrative U.S. sports betting market, and its role as an infrastructure provider in a growing industry sector suggesting significant upside potential.
Overall, Genius Sports is rated a Strong Buy based on the six analysts’ recommendations and price targets. The average price target for GENI stock is $9.08, representing a potential upside of 56.01% from current levels.
GENI Stock in Summary
Standing at the crossroads of the sports, sports betting, and sports media industries, Genius Sports is a compelling option in the burgeoning world of digital sports. The company’s financial performance has been impressive, and it anticipates a continued growth trajectory. Investors can look forward to potentially significant returns as the company continues to forge exclusive, long-term partnerships with major sports leagues and innovators. GENI offers investors an attractive opportunity to capitalize on the thriving digital sports ecosystem.
