Genius Sports Reaffirms 2024 Outlook, Stock Slides on Share Sale

Posted on: January 15, 2025, 03:04h. 

Last updated on: January 15, 2025, 03:22h.

Genius Sports (NYSE: GENI) reaffirmed its 2024 financial guidance on Wednesday, but the stock slumped on news the sports betting data provider is selling shares.

Genius
A slide from a Genius Sports investor presentation. The company reaffirmed its 2024 guidance while announcing a share sale. (Image: Genius Sports)

In late trading, Genius was off 4% on volume that was double the daily average after telling investors it will sell 16.47 million shares at $8.50 apiece in an offering that’s expected to be completed at the close of US markets on Thursday. That’s about 35 cents below where the stock trades as of this writing.

The Company estimates the net proceeds from the offering will be approximately $144 million, after deducting the underwriting commissions and estimated offering expenses. The Company currently expects to use the net proceeds from this offering for general corporate purposes, which may include the acquisition or investment in complementary businesses, technologies or other assets,” according to a press release.

Genius, which has previously been involved in consolidation rumors, cautioned investors it currently has no agreements in place regarding acquisitions. Caledonia and Wellington Management, among other large investors, are participating in the sale.

Genius Guidance Still Solid

Two months ago, Genius told analysts and investors it expected 2024 sales of $511 million on earnings before interest, taxes, depreciation, and amortization (EBITDA) of $86 million. Today, the company reaffirmed those estimates.

Those forecasts imply revenue and EBITDA growth of 24% and 61%, respectively. Genius previously told investors it expects to post 2024 sales of $480 million on adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $75 million. The upped outlook implies 2024 will be the fourth straight year in which Genius grew its top line by at least 20%.

Genius also told investors that it expects to be net cash positive for 2024 and that its cash position is steadily increasing.

“Additionally, the Company reported its preliminary unaudited estimate of cash, cash equivalents and restricted cash as of December 31, 2024, of approximately $135 million, which is expected to be up from $69 million as of September 30, 2024, and up from $126 million as of December 31, 2023. This equates to a positive net cash position for 2024 as previously disclosed as part of our 2024 guidance,” according to the statement.

Why Genius’ War Chest Matters

Should Genius meet or exceed the $135 million cash estimate, it could prove meaningful because it may imply the stock is undervalued relative to the data provider’s liquidity because that amount of cash represents a significant percentage of the company’s market capitalization of $1.93 billion.

The stock is favored on Wall Street with 11 of the 12 analysts covering rating it the equivalent of “buy” or “strong buy.” The other rates a “hold.” The consensus price target on the name is $11.50, implying upside of about 30% from current levels.

Genius has data agreements with the NCAA, NFL, English Premier League (EPL), and Germany’s Bundesliga, among others.