Mister
Oppenheimer believes that Genius Sports Limited (New York Stock Exchange:GENI) is the best option for small cap investors to take advantage of the growing theme of sports betting in the US.
Analyst Jed Kelly said Genius Sports (GENI) is firmly entrenched as a major player in US online sports. betting landscape after extending its partnerships with the National Football League and Football DataCo through 2028 and 2029, respectively. Fundamentally, Genius Sports (GENES) stands out for not being exposed to DraftKings' rapid consolidation of online market share (DKNG) and FanDuel (FLOOD) that is weighing on other small-cap stocks in the US sports betting space. Kelly also noted that a key excess was wiped out of the stock after Genius Sports (GENES) announced that Gabriele Cipparrone, a partner at Apax Partners LLC, resigned from the company's board of directors following the sale of 10 million shares of Apax Funds. That sale reduced Apax Funds' ownership of GENI to ~21.3 million shares, or just under 10% of shares outstanding. Kelly and the Oppenheimer analyst team believe the APAX wildcard has been dragging down GENI stock since the fourth-quarter earnings report, when management provided initial guidance for 2024 that reflected EBITDA growth of 40%, free cash flow that tilted positive and upside potential from an upcoming OSB renewal. cycle. The Apax transaction is expected to remove a distraction for sponsors, improve float/liquidity and refocus investors on the strong fundamentals on display.
Genius Sports (GENI) is highly regarded on Wall Street in general. Notably, 9 out of 10 sell-side companies covering Genius Sports (GENI) have an equivalent Buy rating on the stock. Search Alpha tech and Growth analyst also issued a bullish assessment recently.
Looking ahead, Genius Sports (GENI) said it expects to generate group revenue of approximately $480 million in 2024 and adjusted group EBITDA of approximately $75 million. Notably, Genius Sports (GENI) also expects to generate positive cash flow throughout the year. Analysts expect Genius Sports (GENI) to be close to EPS breakeven in 2025 and show positive EPS in 2026.
