Sportradar shares maintain Buy rating from Benchmark on growth outlook

Sportradar Group AG (NASDAQ: SRAD) has maintained its Buy rating and a $14.00 price target from Benchmark, following discussions at the G2E conference with the company's executive team.

The team expressed a strong sense of optimism regarding Sportradar's growth potential heading into 2025, highlighting the possibility of significant operating leverage during that period.

Sportradar's anticipated growth is expected to be fueled by a combination of robust revenue momentum and an expansion in adjusted EBITDA.

The company's outlook is underpinned by ongoing product innovation, the upselling of advanced services such as Managed Trading Services, and the securing of long-term sports rights agreements, including partnerships with the NBA and ATP.

According to the executive team, operating leverage should begin to positively impact margins starting in Q4 2024. This shift is expected as the company moves past the initial phase of higher sports rights costs, particularly those associated with the NBA deal. This transition is predicted to allow for greater scalability of efficiencies.

In other recent news, Sportradar Group AG reported a substantial 29% increase in its second-quarter revenue for 2024, reaching €62 million. This growth has been significantly driven by a 59% revenue increase in the U.S. market and a 22% rise across Europe, APAC, and Latin America. The company also raised its full-year guidance, expecting revenues of at least €1.07 billion and adjusted EBITDA of at least €204 million.

Sportradar also announced the appointment of Michael C. Miller as Chief Legal Officer, Chief Administrative Officer, and Corporate Secretary, effective October 21, 2024. Miller, with over two decades of legal and business experience, is expected to foster growth and strategic focus within the company.

In terms of analyst actions, Sportradar's stock was upgraded by both JMP Securities and Jefferies, each setting a new price target of $16.00. The upgrades were based on the company's growth potential, particularly in the U.S. market. Canaccord Genuity also increased the price target for Sportradar's shares to $18.00, recognizing the company's significant role in providing products and services to sportsbooks and media companies worldwide.

InvestingPro Insights

Sportradar Group AG's optimistic outlook aligns with several key metrics from InvestingPro. The company's revenue growth of 23.34% over the last twelve months, coupled with a robust 28.64% quarterly revenue growth, supports the executive team's confidence in future expansion. This growth trajectory is further reinforced by a significant EBITDA growth of 56.01% over the last twelve months, indicating strong operational performance.

InvestingPro Tips highlight that Sportradar is trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of 0.43. This suggests that the stock may be undervalued considering its growth prospects, potentially offering an attractive entry point for investors bullish on the company's future.

The company's solid financial position is underscored by the fact that it holds more cash than debt on its balance sheet, and its liquid assets exceed short-term obligations. This financial stability provides Sportradar with the flexibility to invest in product innovation and pursue growth opportunities, as discussed in the article.

For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Sportradar Group AG, providing deeper insights into the company's financial health and market position.

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