Genius Sports Lands ‘Buy’ Rating in New Deutsche Bank Coverage

Posted on: April 21, 2025, 11:28h. 

Last updated on: April 21, 2025, 11:50h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Stock is a play on “macro uncertainty” facing gaming industry
  • Price target implies upside of about 20%

Though it’s following other gaming equities lower on another rough day for stocks, Genius Sports (NYSE: GENI) landed a “buy” rating in new coverage by Deutsche Bank.

Genius
A slide from a Genius Sports investor presentation. Deutsche Bank initiated coverage of the stock with a “buy” rating. (Image: Genius Sports)

In a Monday report to clients, analyst Steven Pizzella initiated coverage of the sports betting data provider with a $12 price target, implying upside of about 20% from where the stock resides at this writing and 16% from the April 18 close. Pizzella called Genius a “defensive” idea and one that can provide investors with a buffer against the macroeconomic headwinds currently afflicting the broader complex of gaming equities.

We believe GENI gives investors a playbook to navigate the potential macro uncertainty, through a business that is largely isolated from multiple potential regulatory and consumer related concerns,” wrote Pizzella.

With Pizzella joining the party, 13 analysts cover Genius Sports with 12 rating the stock the equivalent of a “buy.” Their average price target on the stock is $11.50.

Genius Sport: Predictable Revenue, Limited Downside

In the current market setting, one of the biggest advantages Genius Sports can offer investors is that it’s not tethered to the consumer-facing side of the sports wagering industry. Rather, its primary clients are gaming companies that rely on Genius’ real-time data to expand and power their betting menus.

That’s relevant at a time when some bettors could scale back wager sizes or reduce their wagering frequency because of volatile equity markets and weakness in the broader economy. As Pizzella notes, Genius’ revenue stream is “predictable” because it’s fixed, meaning sportsbook clients pay a set price for the company’s data and services, regardless of betting volume.

“We believe GENI has more limited downside risk to estimates, relative to peers, in an economic downturn scenario,” observes the analyst. “This is due to the fixed revenue stream, combined with a variable revenue stream that we view as less economically sensitive, relative to peers, as GENI end users don’t have to spend additional discretionary income traveling via car and/or airplane to casinos, resorts, cruise ships, or theme parks.”

Pizzella also pointed out that Genius is likely to post a high teens compound annual growth rate (CAGR) over the next three years in terms of sales, thanks in large part to price boosters featured in its agreements with gaming companies. Last month, the company forecast a 21% increase in 2025 revenue.

Genius Balance Sheet Adds to Bull Case

Genius’ strong balance and free cash flow profile could bolster the case for the stock, implying there are valid reasons why the stock is up 14% year to date at a time when most gaming stocks are sliding.

Genius was cash-flow positive last year with 2024 marking the fourth consecutive year in which the company grew sales by at least 20%, and it concluded the year with $110.21 million in cash hand, a nearly 10% increase from 2023. That cash position represents a decent percentage of the firm’s market capitalization of $2.41 billion. Plus, the stock is inexpensive, according to Pizzella.

“GENI is trading at a ~1 turn discount to its historical average earnings before interest, taxes, depreciation, and amortization (EBITDA) multiple and we believe has relative valuation support when comparing to business-to-business peers, especially in the context of a ~33% three year adjusted EBITDA CAGR and a strong balance sheet,” concludes the analyst.