Is Genius Sports Limited (GENI) The Best Sports Betting Stock to Buy Now?

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Is Genius Sports Limited (*****) The Best Sports ******** Stock to Buy Now?

We recently published a list of 

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. In this article, we are going to take a look at where Genius Sports Limited (NYSE:*****) stands against the other sports ******** stocks.

A U.S. Supreme Court decision in 2018 set off a sports ******** ***** that legalized wagering in 38 states and the District of Columbia. North Carolina legalized sports ******** on March 11, and within the first 12 hours of the law’s implementation, the state wagered a remarkable $23.9 million. Of these, 30 states allow online sports ********, so if you’re within state lines, the thrill is only a click away. While most states have a minimum age of 21, a handful allow 18 or older.

Consumers can now bet from anywhere as long as they are physically present in the state due to the growth of online platforms. As a result, Americans legally wagered a record $119.84 billion on sports in 2023, up 27.5% from 2022, per the ********* Gaming Association’s Commercial Gaming Revenue Tracker, ushering in a new era for sports gambling in the US. Consequently, the sports ******** industry’s revenue grew to $10.92 billion, a 44.5% YoY increase from 2022. The expansion was predominantly driven by continuing maturation in most existing markets as well as some new ones, including Massachusetts and Ohio. The trend is expected to continue, and in the second quarter of 2024, ********* sports wagerers wagered $31.75 billion. Revenue from it was $3.16 billion for the quarter, increasing 35.3% from the previous year.

While the ******* States is at the top of the 

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, there are still 12 states in the US that do not allow legal sports ********, including California, Texas, Idaho, Utah, Minnesota, Missouri, Alabama, Georgia, South Carolina, Oklahoma, Alaska, and Hawaii.

Nonetheless, sports ******** is one of the fastest-growing industries in the world. Jane Bokunewicz, director of the Lloyd Levenson Institute at New Jersey’s Stockton University, which studies the gambling industry, points out that legal sports ******** could be appealing to people with limited discretionary budgets since it offers a new and inexpensive form of entertainment.

Goldman Sachs Research also states that the U.S. sports ******** market is expected to grow significantly and, once it reaches maturity, could reach $45 billion each year. This growth will be prompted by new state openings and a growing share of consumer spending on sports ********, per Ben Andrews, head of leisure and travel research at Goldman Sachs in Europe, where legal sports ******** has a longer history.

When it comes to consumer spending on sports ********, gambling interest reflects a sport’s popularity, with NFL football dominating in the ******* States. In 2023, over 73 million Americans said they planned to bet on the NFL season, which is almost 60% more than the previous season, according to a survey conducted by the ********* Gaming Association.

Globally, nearly one-third of people worldwide engage in sports ******** at some point in their lives, based on the TGM 2022 Global Gambling and Sports ******** Survey. In 2021, 17% of people bet on sports with friends (mainly on football and horse racing), while 35.44% bet on sports, and 20.2% bet online/through applications.

According to Deloitte’s 2024 Sports Industry

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, generative AI is projected to dramatically impact sports ******** in the next 12-18 months. The way sports fans interact with sports ******** will probably undergo a revolution because of innovations in domains like personalized ******** experiences, odds calculation, real-time data analysis, and improved prediction models.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (

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Is Genius Sports Limited (*****) The Best Sports ******** Stock to Buy Now?

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Genius Sports Limited (NYSE:*****)

Number of Hedge Fund Holders: 28

Genius Sports Limited (NYSE:*****) is a sports data rights aggregator that supplies live sports data to sportsbooks for over 200,000 events worldwide. Official data rights to leagues such as the NFL, FIBA, MLB, and most notably the EPL have been locked up by ***** through at least 2028.

The primary function of the company’s technology is to gather, organize, and disseminate real-time sports data and analysis to different stakeholders, including media outlets, sportsbooks, and leagues. This is a duopolistic industry that ***** and Sports Radar share, though each company usually has exclusive rights to the sports or leagues that they work with.

The sports data rights aggregator company is well-positioned to continue to gain from the increased legalization of sports ******** and the expansion of in-game ******** in the US.

Voss Capital stated the following regarding Genius Sports Limited (NYSE:*****) in its first quarter 2024 

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“We expect the company to maintain >20% organic revenue growth with >50% incremental EBITDA margins over the next few years. If correct, we believe we are paying < 10x 2027 FCF at today’s market prices.

*****’s new BetVision was only recently launched in September 2023, and it enables in-game bets for the NFL with low latency as well as calculating and displaying real-time analytics and odds. In-game ******** makes up 25% – 30% of bets in U.S. football vs 80%+ in the more mature *** soccer ******** market. We believe NFL games, which comprised 96 out of the top 100 viewed television programs last year, lend themselves even more to in-game ******** with more potential variables/events than soccer. Key to the thesis is that *****’s take rate for in-game bets (5% – 6%) is 3x higher than the take rate on facilitating pre-game bets (1.5% – 2.0%) and comes at zero incremental cost to *****, thus is highly margin accretive with a long runway for increased ************ to catch up to more mature regions like the ***:

“As we continue to increase the in-play ********, we directly benefit from this higher revenue share at no incremental cost, therefore, contributing to our profitability at near 100% margin.” – ***** November 13th, 2023 earnings call

It is notable that ***** has beaten and raised guidance for the last nine quarters in a row, establishing near bulletproof credibility in our minds that management does what they say will do, and yet the market ******** highly skeptical of their visibility on rights costs and the scalability of the NFL and *** soccer rights that ***** pays for and recently extended, thus creating the attractive buying opportunity recently.

Our base case price target of $11.00 (>110% upside) by late 2026 uses 12x 2026 EBITDA. 12x seems ************* in the context of what we anticipate being a 40%+ EBITDA CAGR over the next few years and ultimately a 30%+ EBITDA margin business at maturity in a duopolistic industry structure. Longer term, we believe the upside is much greater.”

Citing Genius Sports Limited’s solid Q2 2024 performance and development potential, Macquarie analyst Chad Beynon maintained a “Buy” rating for the company. The company exceeded revenue and EBITDA estimates due to its growth in the ******** area, margin expansion, and raised 2024 guidance. Chad also points out that, in spite of strong sales and EBITDA growth, the company is valued lower than its peers due to an exclusive arrangement that runs through the 2028–2029 season with Football DataCo.

Genius Sports is anticipated to gain momentum throughout the NFL season, putting it in a better position to benefit from the expanding sports ******** market in North America, especially with its BetVision offering. In addition, the business is well-positioned in a developing industry.

It is one of the Best Sports ******** Stocks to Buy Now. Richard Mashaal’s 

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 is the largest shareholder in the company, with 6,727,424 shares worth $36.66 million.

Overall ***** ranks 9th on our list of the best sports ******** stocks to buy. While we acknowledge the potential of ***** as an investment, our conviction ***** in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ***** but that trades at less than 5 times its earnings, check out our report about the

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#Genius #Sports #Limited #***** #Sports #******** #Stock #Buy

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