JMP Securities maintains Sportradar stock with $19 target

On Monday, JMP Securities reiterated their Market Outperform rating for Sportradar Group AG (NASDAQ:SRAD), maintaining a price target of $19.00. The stock has shown remarkable momentum, delivering a 98.56% return over the past year and currently trading near its 52-week high of $20.92. According to InvestingPro analysis, the company maintains a GREAT financial health score, supported by strong market performance and solid fundamentals. Analysts at JMP Securities highlighted the ongoing negotiations with Major League Baseball (MLB), expecting an announcement soon. They anticipate that the deal will result in a gradual increase in rights, projecting a 15% year-over-year rise in 2025 and a 10% increase in 2026.

The firm also took note of the recent tax rate changes for sports betting in Illinois, which took effect on July 1, 2024. Despite this increase, Sportradar has reportedly not experienced any significant impact, as betting operators have adjusted their operating structures. This resilience is reflected in the company's strong financial performance, with revenue growing 26.55% over the last twelve months. InvestingPro subscribers can access 18 additional key insights about Sportradar's financial health and market position. JMP Securities believes that this resilience suggests a positive outlook for data suppliers like Sportradar, with regulations having minimal effect on their revenue streams.

Sportradar, a provider of sports data and content, continues to navigate through the evolving landscape of sports betting and data rights. The potential MLB deal and the company's ability to withstand regulatory changes are seen as key drivers for its future growth.

The analyst's comments suggest confidence in Sportradar's strategy and market position. With the anticipated MLB agreement and a stable response to the changing tax environment in Illinois, Sportradar is poised to continue its trajectory in the sports data industry.

Investors and market watchers will be keeping an eye on Sportradar's forthcoming announcement regarding the MLB deal, as it could further solidify the company's standing in the sports data market. The firm's ability to adapt to regulatory shifts while maintaining revenue streams may serve as a benchmark for others in the sector. With a healthy current ratio of 1.53 and strong cash position, Sportradar appears well-positioned for future growth. For a comprehensive analysis of Sportradar's valuation and growth prospects, including detailed financial metrics and expert insights, check out the full Pro Research Report available on InvestingPro.

In other recent news, Sportradar, a global sports technology company, has entered a multiyear agreement with Major League Baseball (MLB) to enhance the league's scouting capabilities using its Synergy Coaching and Scouting solution. This partnership will provide MLB and its 30 clubs with comprehensive player analysis and insights, expanding its event coverage from 3,300 to over 20,000 games. In addition, Sportradar recently reported a 27% year-over-year increase in third-quarter revenues, amounting to €255 million, and a 30% rise in adjusted EBITDA to €66 million.

Citi has revised its stance on Sportradar, increasing its price target from $18.00 to $20.00 and maintaining a Buy rating. This change is due to Sportradar's anticipated free cash flow growth, shifting the valuation methodology from revenue multiple to free cash flow multiple. The company also raised its full-year revenue and adjusted EBITDA guidance, indicating strong operational momentum and strategic initiatives towards future growth.

Sportradar has confirmed expectations for higher EBITDA margins in 2025, targeting 25% to 30%. The company is also optimistic about growth in the Brazilian market and ongoing sports partnerships. The pending acquisition of XLMedia is expected to enhance revenue and cost synergies, further strengthening Sportradar's position in the sports betting and entertainment market. These are recent developments that investors should note.

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