- Sportradar stock jumped some 11% on Wednesday.
- The sports betting technology stock made a major acquisition.
- Is Sportradar stock a buy?
The Switzerland-based sports betting technology leader made a major acquisition.
Sportradar (NASDAQ:SRAD) was one of the top-performing stocks on Wednesday, as the sports betting technology provider jumped 11% to around $22 per share.
Sportrader stock is now at its highest level since its IPO in 2021 when it started trading at $27 per share.
The catalyst for the jump was its acquisition of sports data provider IMG Arena, including its sports betting rights portfolio, from Endeavor Group. The deal does not require any financial consideration by Sportradar. Instead, Endeavour Group, which is going private, will pay $125 million to Sportradar and up to $100 million cash prepayments made by Endeavor to certain of the sports rightsholders.
“The unique structure of this transaction accelerates our revenue and cash flow profile and will be immediately accretive to our margins,” Carsten Koerl, CEO of Switzerland-based Sportradar, said. “The addition of these strategic rights will unlock new growth opportunities, enabling us to deliver exceptional value to our partners, clients and shareholders.”
Adding 70 Rightsholders and 30,000 Streaming Events
Through its technology, Sportradar provides betting odds, analytical data, content, streaming and other services for sportsbooks, leagues and federations, and media companies. It partners include DraftKings (NASDAQ:DKNG), FanDuel, the NBA, the MLB, NASCAR, NHL, and Caesars sportsbook, to name a few.
IMG Arena’s portfolio is expected to enhance Sportradar’s content and product offering and strengthen its position as a leading content and data provider for sportsbooks and sports media companies and partners.
The IMG Arena portfolio includes the global betting rights from over 70 rightsholders covering some 39,000 official data events and 30,000 streaming events across 14 global sports on six continents. Key properties include Wimbledon, U.S. Open, Roland-Garros, Major League Soccer, EuroLeague basketball and PGA Tour.
Combined with existing tennis rights, Sportradar will now hold betting rights to three of the four Grand Slam tennis events. It will also combine EuroLeague basketball with Sportradar’s existing partnership with the NBA and WNBA.
Adding these betting rights to its content portfolio expands Sportradar’s content distribution and fuel product development.
Growth Accelerated
The deal is expected to be immediately accretive to revenue, adjusted EBITDA, adjusted EBITDA margins, and cash flow once it closes later this year.
Sportradar also released Q4 earnings on Wednesday, coinciding with this acquisition. It reported a 22% increase in revenue year-over-year to €307 million, while the company had a €1 million net loss. However, adjusted EBITDA increased 53% to €61 million and Adjusted EBITDA margin expanded to 19.7%.
The company also offered guidance for fiscal 2025, but it did not factor in the IMG Arena acquisition, due to the uncertain timing of the closing. It is expected to close in Q4 2025.
Still, it calls for revenue of at least €1,273 million, which would be at least 15% growth over 2024. Adjusted EBITDA is targeted at €281 million, up 26%, while adjusted EBITDA margin is estimated to expand at least 200 basis points. Further, the free cash flow conversionrate is anticipated to be above the 2024 level of 53%.
The stock has been on a tear, rising 27% YTD and nearly 120% over the past 12 months. It is trading as high as it has ever been since the IPO back in 2021, when it dropped below $20 per share within months of its debut.
Sportradar stock carries a high valuation, but its growth has been impressive, and this deal will certainly help. It is probably not wise to buy high now, but look for an opening in the coming months.
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