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Investing.com - Roth/MKM initiated coverage on Sportradar Group AG (NASDAQ:SRAD) with a Buy rating and a $40.00 price target on Friday. The company has demonstrated remarkable momentum, with a 158% return over the past year and revenue growth of 19% in the last twelve months, according to InvestingPro data.
The research firm cited Sportradar’s leading position in the fast-growing sports data and technology services sector as a key factor in its positive outlook for the company. The company maintains strong financial health, earning a "GREAT" overall score from InvestingPro analysts, with notably low debt levels and robust cash position.
Roth/MKM projects four-year revenue and adjusted EBITDA compound annual growth rates of 15% and 28% respectively, excluding the pending IMG Arena acquisition, driven by positive industry tailwinds, a duopoly market structure, and high entry barriers.
The firm also highlighted Sportradar’s 50%+ free cash flow conversion, which it believes creates flexibility for capital returns to shareholders.
The $40 price target is based on 26 times Roth/MKM’s 2026 estimated adjusted EBITDA, representing a 7% discount to the firm’s multi-year growth outlook for the company.
In other recent news, Sportradar Group AG reported record revenue of €318 million for the second quarter, marking a 14% increase compared to the previous year. The company also raised its full-year outlook, attributing this to strong operational momentum across its business segments. Profit for the quarter reached €49 million, a notable improvement from a €2 million loss in the same period last year, aided by strong operating results and a €54 million foreign currency gain. Adjusted EBITDA rose by 31% to €64 million, with margins expanding to 20.1%.
Additionally, the UK’s Competition and Markets Authority has initiated a merger inquiry into the proposed deal between Sportradar and IMG Arena, with a decision expected by October 24. Sportradar has also extended its partnership with Bundesliga International to introduce new data-driven betting products for the 2025-26 season. This expanded collaboration will offer innovative features such as Live Player Markets and AI-driven streaming enhancements. In another development, Goldman Sachs raised its price target for Sportradar to $32, citing margin expansion and maintaining a Neutral rating.
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