Bullish indicating open at $55-$60, IPO prices at $37
On Thursday, Canaccord Genuity maintained a Buy rating on Sportradar Group AG (NASDAQ: SRAD) and raised the price target to $32 from $30. The increase follows Sportradar’s investor day, which took place on Wednesday and showcased the company’s potential for growth. The company, which has delivered an impressive 90.7% return over the past year according to InvestingPro, featured key partners and presentations by senior management, providing insight into product expansion opportunities and a positive financial outlook.
Sportradar, which recently completed a rights deal with Major League Baseball (MLB), is poised for a period of substantial growth. The company’s strong financial health, rated "GREAT" by InvestingPro, supports its expansion plans. With a solid balance sheet showing more cash than debt and expected revenue growth of 15% for FY2025, the company is well-positioned to benefit from economies of scale in sports rights costs, strong partnerships with leagues and off-site betting (OSB) operators, and the potential to market a broader range of products to its international customer base.
The firm’s strategic position is further bolstered by management’s presentation of a growth and profitability algorithm that suggests approximately 15% long-term growth, significant margin expansion, and improved free cash flow (FCF) conversion. While Canaccord Genuity’s analyst views the current valuation as reasonable, InvestingPro’s Fair Value analysis suggests the stock may be trading above its intrinsic value. Get access to 14 additional ProTips and comprehensive valuation metrics with an InvestingPro subscription.
Sportradar’s investor day emphasized the company’s readiness to leverage its sports rights effectively and capitalize on the opportunities presented by its global customer base. The financial outlook provided by the management indicates a strong trajectory for the company’s growth and profitability in the coming years.
In other recent news, Sportradar Group AG has been the focus of several analyst updates and strategic moves. The company hosted an Investor Day where it outlined ambitious financial targets for 2027, including at least €1.7 billion in revenue and €275 million in free cash flow, as noted by JMP analysts who maintained a Market Outperform rating with a $25.00 price target. Guggenheim also maintained a Buy rating, setting a $27.00 price target, citing confidence in Sportradar’s multi-year financial outlook and growth potential. In addition, Needham raised Sportradar’s price target to $27.00 after the company reported strong fourth-quarter earnings that surpassed expectations, leading to revised revenue and EBITDA forecasts for 2025.
Sportradar’s strategic acquisition of IMG Arena’s global sports betting rights was another highlight, with JMP Securities increasing its price target to $24.00 following the deal. This acquisition is expected to significantly enhance Sportradar’s market position in basketball, soccer, and tennis, contributing an estimated €135 million in revenue and €35 million in EBITDA in the first year. Needham analysts anticipate the IMG Arena deal could add €150 million in revenue and €35-40 million in adjusted EBITDA, reflecting a positive outlook on Sportradar’s growth trajectory.
The company continues to leverage its expansive sports technology platform to capture opportunities in the expanding sports entertainment and betting markets. Analysts from Guggenheim and JMP have expressed confidence in Sportradar’s ability to meet its financial goals, despite potential execution and market risks. Sportradar’s robust financial health, strategic acquisitions, and strong industry positioning underscore its potential for sustained growth and value creation.
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