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Investing.com - UBS lowered its price target on Genius Sports Ltd. (NYSE:GENI) to $12.00 from $13.00 while maintaining a Neutral rating, citing concerns about the company’s cash flow guidance. The stock currently trades at $10.22, slightly above InvestingPro’s Fair Value assessment, with analyst targets ranging from $10 to $16.
The firm noted that despite Genius Sports highlighting a $1 million increase in its EBITDA guidance, the company appears to have lowered its cash flow outlook in its third-quarter results without directly addressing the change during the earnings call. This comes despite strong revenue growth of 30.7% over the last twelve months.
Genius Sports now guides for "positive cash flow in FY25," which UBS interprets as a downgrade from previous guidance of "increased positive cash flow in FY25" that had been maintained for the last three quarters. The prior guidance would have suggested free cash flow higher than the $18 million expected in FY24. Despite current cash flow challenges, InvestingPro tips indicate analysts expect the company to be profitable this year with an EPS forecast of $0.33 for FY2025.
Year-to-date free cash flow through Q3 was -$63 million, 20% worse than the -$52 million reported in the same period last year. The current guidance implies Q4 free cash flow must exceed $63 million to reach positive territory for FY25, compared to $70 million free cash flow in Q4’24.
Genius Sports has indicated that Q4 free cash flow will be negatively impacted by an undisclosed one-time litigation expense, according to UBS.
In other recent news, Genius Sports Limited has announced a global partnership with Publicis Sports to enhance fan engagement using its FANHub advertising platform. This collaboration aims to provide Publicis Sports clients with access to advanced sports advertising technologies that connect brands with verified fans during key sporting events. In financial updates, Citizens has reiterated its Market Outperform rating for Genius Sports, setting a price target of $15.00. The firm anticipates discussions on EBITDA margin progression and media business trajectory during the upcoming investor day. Meanwhile, Wells Fargo has initiated coverage on Genius Sports with an Equal Weight rating and a price target of $10.00, basing its valuation on future EBITDA projections. Additionally, Genius Sports plans to change its independent auditor from WithumSmith+Brown to KPMG starting in the fiscal year ending December 31, 2026, following the completion of Withum’s audit for the 2025 fiscal year. These developments reflect ongoing strategic moves and financial evaluations for the company.
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