On Friday, B.Riley resumed coverage on Genius Sports Ltd. (NYSE: GENI), assigning the stock a 'buy' rating and setting a price target of $9.00. The firm highlighted Genius Sports as a leading investment opportunity within the rapidly growing global online sports wagering industry.
According to B.Riley, Genius Sports' core strength lies in its real-time sports data, which is central to the sports betting content ecosystem. The firm's technology has significant integration with both sportsbooks and leagues, which B.Riley believes makes Genius Sports a difficult competitor to displace and an attractive partner for new ventures. This position could lead to further opportunities for monetization.
The analyst pointed out that recent and upcoming agreements with the NFL and Football DataCo for official data rights and technology extensions are crucial. These deals are expected to alleviate primary investment risks for the next four to five years and support the company's technology-focused business strategy.
Furthermore, despite the rising costs associated with rights, Genius Sports' expenses are largely fixed, allowing for continued expansion in revenue and profit potential. B.Riley views the company's outlook for the calendar year 2024 as conservative, even with an anticipated 41% growth in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
InvestingPro Insights
As Genius Sports Ltd. (NYSE: GENI) garners a 'buy' rating and optimism from B.Riley, insights from InvestingPro paint a detailed financial picture. The company's market capitalization stands at approximately $1.19 billion, reflecting its presence in the sports data industry. Notably, Genius Sports holds more cash than debt on its balance sheet, which is a strong indicator of financial health and may provide resilience against market volatility.
However, the company faces challenges, as evidenced by weak gross profit margins of 16.71% over the last twelve months as of Q1 2023. Additionally, two analysts have revised their earnings downwards for the upcoming period, signaling potential concerns about future profitability. Despite a revenue growth of 21.1% in the same period, the company has not been profitable over the last twelve months and does not pay a dividend to shareholders, which may influence investment decisions.
For those considering an investment in Genius Sports, utilizing InvestingPro could provide a deeper analysis. With a total of 8 additional InvestingPro Tips available, investors can gain a more comprehensive understanding of the company's financial nuances. To access these insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at https://www.investing.com/pro/GENI.
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