This price target suggests a potential upside of 25 percent from the recent close on May 26, albeit slightly below the Wall Street consensus of $7.50. This positive sentiment is shared by several other analysts, with a majority of them also recommending a Buy or Strong Buy rating on the stock.
Based in London, Genius Sports went public in April 2021 via a reverse merger with dMY Technology Group, Inc. II.
Earlier this month, it was honored with the Heavy Hitter award at the inaugural Titans Sports Betting conference hosted by Benzinga for its remarkable market share gains, competitive strengths and strategic recognition.
Last month, it also won the Sports Betting Supplier prize at the prestigious EGR North America Awards 2023.
Initially, investors’ enthusiasm for the Special Purpose Acquisition Company (SPAC) and sports betting stocks benefited the stock. It even reached a high point above $24 in 2021.
The company’s stock, however, slumped last year along with other SPAC and sports betting stocks as market sentiment shifted away from such equities. Martinuzzi described the case as a “Genius baby being thrown out with the SPACwater.”
The future of Genius Sports
Martinuzzi referred to Genius Sports as a “picks and shovels player” or key provider of in-game data, as it provides essential services to major sportsbooks like DraftKings, Bet365 and FanDuel.
With a focus on live betting data and other valuable offerings, Genius Sports aims to cater to the growing demand for in-game wagers over traditional pregame investments.
Therefore, some analysts indicate that the stock of Genius Sports could see advantages from the growing popularity of in-game or live wagers compared to pregame investments.
“Genius is on the cusp of turning free cash flow positive and is growing faster than its higher-valued peers,” wrote Martinuzzi in a recent note to his clients.
He also said that Genius Sports has stronger rights relationships with sports associations, including the NFL and English Premier League, compared to data licensing competitor Sportradar. He expected Genius to demonstrate significant growth in profitability due to the ongoing expansion of online gambling as more states legalize sports betting in the United States.
Genius Sports maintains noteworthy qualities in the realm of sports betting equities, as it stands out by hovering around profitability and consistently generating free cash flow. Its gross gaming revenue is projected to nearly double from $31 billion in 2020 to $59 billion by 2025.
Genius Sports’ client roster
Martinuzzi’s mention of Genius Sports’ client portfolio holds weight. The company’s client roster currently includes the English Premier League, NFL, PGA Tour, MLB, NCAA, and EuroLeague Basketball.
The company also recently signed a data and streaming partnership with the European League of Football.
“With the new season set to start on June 3, the ELF joins the NFL, CFL, XFL, and NCAA as part of our year-round football offering,” reads the company’s statement on its Twitter account.
The company has established partnerships with over 400 sports leagues and organizations. Genius Sports establishes connections across the entire sports ecosystem by leveraging big data, computer vision, machine learning, and augmented reality.
Aside from working with major sports associations, Genius Sports works with prominent sports media players, such as CBS, ESPN, TSN, Turner, Fox Sports, and BT Sport.
In addition to Bet365 and DraftKings, other notable sportsbook clients include 888 Sports, BetMGM, and Caesars, as listed on the company’s website.
