Benchmark has maintained its positive stance on Genius Sports Ltd. (NYSE: GENI), reiterating a Buy rating and a $10.00 price target for the company's stock.
The affirmation comes despite some investor concerns regarding the absence of recent updates from Genius Sports, which are deemed critical for the company's fiscal fourth quarter of 2024 growth guidance.
The firm highlighted its confidence in Genius Sports' ability to renew contracts with domestic sportsbook operators successfully.
The confidence is underpinned by the company's role as an integral "pick-and-shovel" provider in the expanding global gambling market, which Genius Sports supports with its robust data rights portfolio and advanced technology solutions.
Benchmark's analyst pointed out the potential for Genius Sports to benefit significantly from the gambling market's growth. The firm estimates that Genius Sports' adjusted EBITDA (AEBITDA) for fiscal year 2025 will reach $108 million. Given this projection, the firm maintains its price target of $10, applying a 22x multiple to the estimated AEBITDA.
In other recent news, Genius Sports Limited has made several key moves. The company reported strong Q2 2024 earnings, with revenues of $95 million and an adjusted EBITDA of $21 million, surpassing market expectations.
It is targeting a revenue of $510 million and an adjusted EBITDA of $85 million for the full year of 2024, which includes a 29% revenue growth in the second half of 2024 compared to the same period in 2023.
The company has announced two significant appointments: Robbie Bach, former Chief Xbox Officer at Microsoft (NASDAQ:MSFT), has joined the Board of Directors, and Mark Kropf, former Technical Director at Google (NASDAQ:GOOGL)'s Office of the CTO, has assumed the role of Group Chief Technology Officer. Both are expected to contribute significantly to the company's mission and technological advancements.
Genius Sports has also extended its exclusive data partnership with Football DataCo, securing data rights for the English Premier League until 2029. In addition, the company will supply the league with a new semi-automated offside technology system from the 2024/25 season, powered by its GeniusIQ platform.
Benchmark has maintained its Buy rating on shares of Genius Sports, citing the expanding total addressable market for sports betting, particularly in the U.S., as a positive indicator. However, Genius Sports has publicly denied any merger discussions with Kambi, addressing recent market rumors.
InvestingPro Insights
Complementing Benchmark's optimistic outlook on Genius Sports Ltd. (NYSE:GENI), recent data from InvestingPro provides additional context to the company's financial position and market performance. Despite the lack of recent updates causing investor concern, InvestingPro data shows that GENI has experienced a strong return over the last three months, with a price total return of 29.63%. This aligns with Benchmark's confidence in the company's potential.
InvestingPro Tips highlight that analysts anticipate sales growth in the current year, supporting Benchmark's positive stance on GENI's future performance. However, it's worth noting that the company is not expected to be profitable this year, which investors should consider alongside the growth projections.
The company's market cap stands at $1.54 billion, with a revenue of $444.07 million for the last twelve months as of Q2 2024. While GENI suffers from weak gross profit margins, as indicated by an InvestingPro Tip, the gross profit margin of 17.11% for the same period suggests room for improvement in operational efficiency.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights, with 5 more tips available for Genius Sports on the platform.
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