Genius Sports (GENI), the data, technology, and broadcast partner powering the global sports ecosystem, continues to make influential strides in the industry with its cutting-edge technology and broad worldwide reach, with a recently announced deal with ESPN, a partnership with Reddit (RDDT), and the launch of FANHub, the world’s first ad and activation platform designed for sports fans. The company posted top-and-bottom-line beats for Q3 2024 and issued an optimistic financial outlook for the rest of the year. The stock appears promising for investors interested in exposure to the intersection of sports and technology.
Don't Miss Our Christmas Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Genius Sports Expanding its Partnerships
Genius Sports specializes in data, technology, and broadcasting, designed to enhance the connection between sports, betting, and media. It has partnered with over 400 sports organizations across 150 countries, including prominent leagues and federations.
The company offers various services, from developing and selling technology-led products to live sports data collection, odds feeds, risk management services, live streaming services, and digital marketing campaign optimization.
The company recently announced a long-term collaboration with ESPN to improve data-driven storytelling for NCAA sports and broadcasts for the NBA and WNBA. It has also teamed up with Reddit to introduce a sports scores feature powered by official NFL data. Additionally, a partnership began with The Los Angeles Rams to augment in-game highlights within SoFi Stadium with data-driven insights. Finally, the company launched the world’s first advertising and activation platform for sports fans, FANHub.
Genius’ Recent Financial Results & Outlook
The company recently announced results for Q3 2024. Revenue of $120.2 million beat analysts’ expectations while marking an 18% year-over-year increase. Betting Technology displayed exceptional performance, with revenue surging 30% to $85.6 million. This was mainly due to increased customer engagement, contract renewals, and renegotiations. Conversely, Media Technology and Sports Technology & Services revenues slipped by 4% and 3%, respectively, to $22.1 million and $12.4 million.
Net income was $12.5 million, a dramatic turnaround from the $11.6 million loss experienced in the same quarter the previous year. Adjusted EBITDA hit $25.7 million, demonstrating a 45% increase from Q3 2023 figures and a margin expansion of 400 basis points. The reported GAAP EPS was $0.05, surpassing consensus estimates by $0.06.
Following its positive Q3 earnings report, GENI’s management has issued guidance for 2024. The company projects revenue of around $511 million and adjusted EBITDA of nearly $86 million, indicating annual growth of 24% and 61%, respectively.
What Is the Price Target for GENI Stock?
The stock has shown some volatility (beta of 1.97), climbing over 27% in the past year. It trades near the high end of its 52-week price range of $4.91 – $10.15 and shows positive ongoing price momentum as it trades above all major moving averages. Its P/S ratio of 4.5x is a relative discount to the Internet Content & Information industry average of 6.3x.
Analysts following the company have been constructive on GENI stock. For instance, Macquarie analyst Chad Beynon has maintained an Outperform rating while increasing the price target on the shares from $10 to $12, noting a projected surge in the sports betting sector, influenced by growing mainstream acceptance, legalization, higher structural hold, and an uptick in in-play betting.
Genius Sports is rated a Strong Buy overall, based on the aggregate recommendations of ten analysts. The average price target for GENI stock is $11.19, representing a potential upside of 22.83% from current levels.
Genius Sports in Summary
Genius Sports continues to grow its footprint in the sports industry through its pioneering technology and impressive global partnerships with ESPN, Reddit, and the Los Angeles Rams. Q3 2024 results exceed market expectations, aided by a remarkable upsurge in its Betting Technology services. The financial outlook is also robust, echoed by analysts’ positive sentiment, making it an attractive investment option for those keen on exploring opportunities in the burgeoning intersection of sports and technology.
