Financial services giant Macquarie has thrown its weight behind Genius Sports Limited, a sports betting data provider, with an optimistic Outperform rating. The move comes as the company positions itself at the forefront of the surging wave of NFL betting, driven by factors such as regulatory changes, the widespread embrace of sports betting, a shift towards in-game wagering, margin expansion, organic expansion, and strategic mergers and acquisitions.
Chad Beynon of Macquarie Predicts Genius Sports Shares to Double in One to Two Years
Macquarie analyst Chad Beynon outlined the catalysts contributing to Genius Sports’ potential growth, emphasizing its role as a vital contributor to sports fan engagement. Beynon envisions a doubling of the company’s shares over the next one to two years, attributing this growth to the significance of Genius Sports’ player statistics, artificial intelligence (AI) data, and its capacity to bring this data to life.
The report predicts a robust growth trajectory for the North American online sports betting market, estimating a Compound Annual Growth Rate (CAGR) of 24% through 2026, culminating in a gross gaming revenue of $22 billion. Macquarie suggests that Genius Sports is well-positioned to outpace this growth curve, driven by increased event utilization, the introduction of new products, and the expanding popularity of in-game betting.
A noteworthy factor working in favor of Genius Sports is the secure revenue stream guaranteed by the National Football League (NFL), projected to reach a substantial $126 billion from its media and TV deals. According to Beynon, Genius Sports now stands at the technological epicenter of the NFL’s rising tide, positioning itself as a crucial player in the sports betting landscape.
Genius Sports’ Stock Surges 2.27% After Macquarie Sets Ambitious $11 Price Target
To quantify their bullish outlook, Macquarie has set a price target of $11 on Genius Sports, representing a 77.4% upside from the current closing price of $6.20. This valuation is based on a 15X multiple of the 2026 EBITDA estimate and a free cash flow yield of 4.7%.
In response to Macquarie’s endorsement, Genius Sports experienced a 2.27% surge in premarket trading, reaching $6.30. This positive momentum comes on the heels of a year that has seen the company’s stock climb by an impressive 73.67%, further solidifying its position as one of the top-performing sports wagering equities.
Last month, Genius Sports reported a substantial 29.3% increase in Q3 revenue, reaching $101.7 million, leading to an upward revision of its full-year guidance.
With growth across all segments, including a notable 34.1% rise in the betting technology division, the company’s year-to-date revenue has surged by 21.3%, totaling $285.8 million, prompting an adjusted full-year guidance of approximately $412.0 million in group revenue and $53.0 million in group adjusted EBITDA.