Sportradar Stock Has More Upside Ahead Says Analyst

Posted on: February 12, 2025, 01:54h. 

Last updated on: February 12, 2025, 02:41h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Sportradar stock is soaring and some on Wall Street are constructive on the name
  • Contract visibility and a strong balance sheet are among the catalysts

Shares of Sportradar (NASDAQ: SRAD) are on a torrid pace, surging nearly 15% over the past month and 24% to start 2025, but at least one analyst believes the high-flying stock has more upside ahead of it.

Sportradar Stock
The Sportradar and MLB logos. An analyst is bullish on the sports betting data provider. (Image: Sportradar)

In a new report to clients, Deutsche Bank analyst Steven Pizzella reiterated a “buy” rating on the sports betting data provider while lifting his price target to $24 from $19. That implies upside of about 13% from Tuesday’s close.

“Overall, we continue to believe SRAD gives investors, who are interested in gaining long-term exposure to the rapidly growing sports betting industry, a pure-play way to get leverage to the theme, through a profitable and majority subscription-based (~70% of revenue), business-to-business (B2B) operating model,” writes Pizzella.

Said another way, Sportradar and rival Genius Sports (NYSE: GENI) provide data services to sportsbook operators and don’t deal directly with bettors. As such, they’re more technology than consumer cyclical companies, providing investors with some insulation from often volatile discretionary spending trends.

Sportradar Stock Has Room to Grow

After a lengthy stretch of trading mostly flat, Sportradar stock has more than doubled over the past year and is residing at its highest levels since October 2021.

Potentially indicating there’s more room for upside are two points. First, the shares trade below where they did soon after the September 2021 initial public offering (IPO). Second, the company’s market capitalization is just $6.34 billion, implying ample room for growth.

Importantly, Sportradar is also a cash-rich story thanks to a strong balance sheet and earnings and revenue visibility by way of its long-term contracts with clients.

“Given; 1) one of the strongest growth profiles within our coverage universe, (~20% 3-year adjusted EBITDA CAGR), 2) a strong balance sheet, in a net cash position, 3) increased operating leverage in the out years, 4) key long term contracts, locked in for approximately six plus years on average, and 5) a reasonable valuation, when looked at in terms of SRAD’s growth prospects and comps, we reiterate our Buy rating,” adds Pizzella.

Speaking of Sportradar Contracts …

Sportradar has long-term contracts with major professional sports leagues including the Bundesliga, Major League Baseball (MLB), the NBA, NHL, and UEFA. The company recently announced an extension of the MLB pact, taking the agreement through 2032. Some of those leagues are equity investors in Sportradar, too.

The clarity indicates there’s minimal contract risk over the next several years, which allows Sportradar to focus on other growth opportunities, notes Pizzella.

“Remember, sports rights are amortized on a straight-line basis, over the life of each contract, so there is enhanced visibility into a big portion of the cost basis moving forward and the opportunity to drive incremental operating leverage,” concludes the analyst. “In addition, we note, given SRADs growth, size, and scale, we believe SRAD will be competitive to renew these contracts at accretive terms and will be in a strong position to bid on new contracts.”