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On Thursday, JMP Securities analyst Jordan Bender increased the price target for Sportradar Group AG (NASDAQ: SRAD) to $24.00, up from the previous $22.00, while maintaining a Market Outperform rating on the company’s shares. The company’s stock has shown remarkable momentum, delivering a 103% return over the past year and currently trading near its 52-week high of $22.94. InvestingPro analysis reveals 15+ additional investment insights for this rapidly growing company. The upward revision follows Sportradar’s acquisition of IMG Arena’s global sports betting rights, which is expected to enhance the company’s position in the market for the top three most bet-on sports worldwide: basketball, soccer, and tennis.
The terms of the acquisition, which involve Sportradar being paid to assume the rights, suggest IMG Arena’s eagerness to exit the industry and Sportradar’s capability to convert these rights into a profitable venture. The analyst projects that in the first year, the deal will bring in approximately €135 million in revenue and €35 million in EBITDA, reflecting margins greater than 25%. These figures include some anticipated revenue synergies. With current annual revenue of $1.15 billion and an EBITDA of $433.64 million, InvestingPro data shows the company maintains strong financial health with a "GOOD" overall rating.
Sportradar is essentially being compensated $125 million to acquire the rights portfolio, while the sellers have agreed to cover the gap with the leagues for any difference between the fair market value of the rights and the contractual obligations, amounting to $100 million. Even if Sportradar had not been paid the $125 million, the transaction would still be financially beneficial for the company.
After discussions with Sportradar’s management, the JMP Securities analyst expressed confidence in the company’s ability to effectively integrate the newly acquired portfolio into its existing operations. The deal, initially seeming too favorable, has been validated by the management’s assurances regarding the strategic fit and potential for positive cash flow resulting from the acquisition.
In other recent news, Sportradar Group AG reported a strong fourth-quarter performance, with revenue reaching $370 million, marking a 22% increase year-over-year. Despite this growth, the company’s earnings per share fell short of expectations, coming in at $0.00 against a forecasted $0.04. The company announced an acquisition deal for IMG Arena, which is anticipated to add substantial revenue and enhance EBITDA margins. Needham raised Sportradar’s stock target to $27, citing the company’s robust Q4 results and the strategic acquisition of IMG Arena. Similarly, Benchmark increased their price target for Sportradar to $26, emphasizing the company’s record revenue and significant EBITDA growth.
Guggenheim maintained its Buy rating for Sportradar, with a stable price target of $27, noting the acquisition’s potential to be immediately accretive. Sportradar’s financial outlook for 2025 projects a 15% revenue increase to at least $1.273 billion and a 26% rise in adjusted EBITDA to $281 million. The company’s U.S. market has shown significant growth, now accounting for 24% of total revenue with a 58% increase year-over-year. Sportradar’s management highlighted their strong liquidity position and potential for accelerated share repurchase programs, reflecting confidence in the company’s financial health and future prospects.
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