Sports betting data provider Genius Sports (NYSE:GENI) is entering the free-to-play (F2P) games arena with…
Posted on: September 10, 2021, 12:15h.
Final up to date on: September 10, 2021, 01:38h.
Todd Shriber Learn Extra
Clearly, there’s one thing about soccer season and its affect on sports activities wagering equities. Genius Sports activities (NYSE:GENI) inventory is flirting with a acquire of eight % this week and is increased by 21.6 % over the previous month.
Genius Sports activities CEO Mark Locke in a CNBC interview, seen above. An analyst sees rather more upside coming for the shares. (Picture: CNBC)
That torrid tempo isn’t stopping some analysts from waxing bullish on the sports activities betting knowledge supplier. In a brand new word to purchasers, B. Riley analyst David Bain resumes protection of Genius with a “purchase” score and a $32 worth goal. That suggests upside of greater than 39 % from present ranges.
GENI’s established and augmenting market place captures seen, steady, ahead on-line sports activities e book (OSB) complete addressable market (TAM) will increase, in addition to rising OSB advertising and marketing spend (a second important TAM feed),” says Bain.
“Whereas we worth GENI equally to different B2B on-line gaming firms, we imagine GENI’s deep know-how and on-line, operational integration with the sports activities business might ultimately unleash valuation multiples akin to SaaS firms, providing important potential upside to our worth goal,” Bain continued.
“SaaS” refers to software program as a service, vernacular that’s commonplace within the know-how sector, indicating that a method of deciphering the above feedback is that Genius ought to be valued extra on par with a cloud computing firm and fewer as a sports activities betting enterprise.
Genius Inventory Unbelievable Soccer Play
Genius Sports activities turned a freestanding public agency in April following a merger with a particular goal acquisition firm (SPAC). Its seasonal tendencies as they associated to the sports activities calendar haven’t been examined over a number of years.
Nonetheless, it’s clear Genius inventory is conscious of the beginning of soccer season, which is smart as a result of that’s essentially the most wagered-on sport within the US. This week, the corporate inked offers with a number of sportsbook operators to supply advertising and marketing know-how and help.
Genius doesn’t function as a consumer-facing sportsbook. Quite, sportsbook operators purchase knowledge from the corporate and its opponents. It’s anticipated these purchases will improve over time, as regulated sports activities betting and in-game wagering improve in recognition within the US. As Bain notes, that may very well be a long-term optimistic for Genius inventory.
“OSBs require an in depth, steady provide of betting content material, positioning real-time sports activities knowledge because the nucleus of the sports activities betting ecosystem, in our view,” mentioned the analyst. “Showcasing the significance of dependable, high-accuracy, real-time knowledge, near 80% of European OSB wagers are in-game bets. We estimate US in-game betting already accounts for near 30% of wagers, and these wagers ought to eclipse 50% of the whole by 2023.”
Extra Avenues for Genius Upside
Whereas the funding neighborhood primarily views Genius as an information supplier, the corporate has different levers to tug to diversify its income stream.
“GENI’s Media Tech division possesses distinctive and typically proprietary entry to sports activities knowledge, stay odds, and a number of media shops/web sites for warmth mapping and analytics—all of which permit for extra focused, efficient advertising and marketing choices for OSBs,” provides Bain. “Already, GENI has greater than 100 media and promoting clients, together with from giant OSBs, similar to FanDuel.”
With $275 million in money and no long-term debt, Genius provides buyers a strong steadiness sheet and suppleness by way of potential consolidation exercise sooner or later.
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