Genius Sports Limited (NYSE:GENI) is a “best-in-class provider” of “pick-and-shovels” to the global online sports betting industry, says one analyst
Capital Ideas Media | July 30, 2021 | SmallCapPower: Gambling on sporting events is a multi-billion dollar industry that had mostly occurred outside the law (except in jurisdictions such as Nevada).
(Originally published on Capital Ideas Media on June 8, 2021)
That changed in the U.S. in 2018, when the Supreme Court ruled the Professional and Amateur Sports Protection Act, which outlawed betting, was unconstitutional.
In Canada, the House of Commons passed Bill C-218 in April, also known as the Safe and Regulated Sports Betting Act, which would remove the federal ban on single-event sports betting and let each province and territory decide whether to allow it within their borders.
The expected surge in legal sports betting in North America over the next few years is good news for Genius Sports Limited (NYSE:GENI).
Genius Sports acquires data from sports events around the world and supplies it to sports betting operators, providing them with information that helps them better engage with and protect their customers. Genius provides data on more than 240,000 events each year and is the official provider for over 150,000 of these events.
The Company also offers digital marketing to customers to provide fans with personalized, multi-channel content.
Genius Sports recently announced its Q1 2021 financial results, which saw its revenue climbed 52% year over year to $53.7 million, while recording a 414% surge in its Adjusted EBITDA to $9.3 million. The Company also raised its full-year revenue guidance to $250 million to $260 million, from $190 million previously.
Goldman Sachs analyst Stephen Grambling initiated coverage of Genius Sports recently with a “Buy” rating and a target price of $31 per share, forecasting the Company’s revenue growth at 31% annually through 2025 to $578 million.
Mr. Grambling called Genius a “best-in-class provider” of “pick-and-shovels” to the “rapidly growing” global online sports betting industry.
Genius Sports recently signed a six-year strategic partnership with the National Football League (NFL) that would make Genius the NFL’s exclusive distributor of real-time official play-by-play statistics, which Benchmark analyst Mike Hickey believes “cements” the Company’s “leadership position with the most important domestic sporting leagues.”
Genius has also been busy on the acquisition front recently, announcing an accretive deal to buy data tracking and visualization services provider Second Spectrum, in addition to FanHub, a provider of free-to-play games.
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