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Oppenheimer thinks Genius Sports activities Restricted (NYSE:GENI) is the best choice for small-cap traders to play the U.S. sports activities betting progress theme.
Analyst Jed Kelly mentioned Genius Sports activities (GENI) is firmly entrenched as a principal participant within the U.S. on-line sports activities betting panorama after extending its Nationwide Soccer League and Soccer DataCo partnerships into 2028 and 2029, respectively. Crucially, Genius Sports activities (GENI) is highlighted as not being uncovered to the speedy on-line market share consolidation from DraftKings (DKNG) and FanDuel (FLUT) that’s weighing on different small-cap shares within the U.S. sports activities betting house.Kelly additionally identified {that a} key overhang was faraway from the inventory after Genius Sports activities (GENI) introduced that Gabriele Cipparrone, companion at Apax Companions LLC, resigned from the corporate’s board of administrators following Apax Funds’ 10M sale of inventory. That sale decreased Apax Funds’ GENI possession to ~21.3M shares, or barely lower than 10% of shares excellent. Kelly and the Oppenheimer analyst group suppose the APAX wildcard has been draggin on GENI shares for the reason that This fall earnings report, when administration supplied preliminary 2024 steering that mirrored 40% EBITDA progress, free money stream inflecting to optimistic, and potential upside from an upcoming OSB renewal cycle. The Apax transaction is predicted to take away a sponsor distraction, enhance float/liquidity, and refocus traders again to the strong fundamentals being displayed.
Genius Sports activities (GENI) is well-liked on Wall Road typically. Notably, 9 out of 10 sell-side companies overlaying Genius Sports activities (GENI) have a Purchase-equivalent score within the inventory. In search of Alpha analyst Tech and Development additionally issued a bullish appraisal lately.
Trying forward, Genius Sports activities (GENI) mentioned it expects to generate group income of roughly $480M in 2024 and group adjusted EBITDA of roughly $75M. Notably, Genius Sports activities (GENI) additionally expects to generate optimistic money stream for the complete 12 months. Analysts anticipate Genius Sports activities (GENI) to be near EPS break-even in 2025 and present optimistic EPS in 2026.
