Sportradar stock holds Market Perform amid EBITDA outlook

On Tuesday, Sportradar Group AG (NASDAQ:SRAD) maintained its Market Perform rating from JMP Securities. The firm's position reflects a cautious stance on the stock, with Sportradar's shares trading at 10.6 times the estimated 2025 EBITDA, alongside a 6% free cash flow yield. JMP Securities awaits further details on the company's EBITDA growth trajectory before considering a higher valuation multiple that aligns with the long-term prospects of the industry.

Sportradar, which competes in the global data rights arena, is currently viewed as fairly valued at the market price, with analysts suggesting that potential investors might benefit from waiting for a more advantageous entry point. The firm has expressed a preference for Genius Sports in the post-investment period when evaluating the competitive landscape.

In terms of financial projections, JMP Securities has slightly modified its EBITDA estimates for Sportradar for the years 2024 to 2026. The new estimates are set at €206 million for 2024, €256 million for 2025, and €307 million for 2026.

These figures have been adjusted from the previous forecasts of €204 million, €255 million, and €306 million, respectively, indicating modest revisions to the company's expected financial performance.

While the rating remains unchanged, the slight increase in EBITDA estimates could imply a stable yet cautious optimism about Sportradar's financial health and its position within the competitive landscape of sports data rights. Investors and market watchers will be looking out for further clarity on the company's growth and performance to assess the timing and potential value of investments in Sportradar shares.

In other recent news, Sportradar Group AG reported a strong financial performance in the first quarter of 2024, with a 28% increase in quarterly revenue and a 29% rise in adjusted EBITDA.

This growth was primarily driven by the Betting Technology & Solutions segment, which saw a 35% rise in revenue. Following these positive results, Sportradar has raised its full-year 2024 outlook, now expecting at least 21% growth in both revenue and adjusted EBITDA.

In addition, Sportradar has expanded its partnership with the Union of European Football Associations (UEFA) through a multi-year extension of their betting data rights agreement.

This deal grants Sportradar the non-exclusive right to distribute data to non-betting media and access to advanced tracking to enhance its AI-driven products and services.

Analysts have responded to these developments with mixed views. JPMorgan downgraded Sportradar's stock to a neutral rating from overweight, while Benchmark raised the price target for Sportradar shares to $12, maintaining a buy rating. These are the recent developments shaping Sportradar's journey in the market.

InvestingPro Insights

In light of JMP Securities' recent analysis of Sportradar Group AG (NASDAQ:SRAD), additional insights from InvestingPro could provide investors with a broader context. According to InvestingPro data, Sportradar holds a market capitalization of $3.37 billion, with a P/E ratio of 116.68, which adjusts to 60.65 when considering the last twelve months as of Q1 2024. This high earnings multiple could be justified by the company's strong revenue growth of 21.57% over the last twelve months, a figure that underscores its potential in the competitive sports data market.

Furthermore, Sportradar's stock has returned 19.85% over the last three months, indicating a robust short-term performance that aligns with JMP Securities' recognition of the company's stable financial health. Two InvestingPro Tips for Sportradar are particularly noteworthy: the company is trading at a low P/E ratio relative to near-term earnings growth, and analysts predict the company will be profitable this year. These tips suggest that the stock may offer value to investors who are confident in Sportradar's growth trajectory and profitability outlook.

For those considering an investment in Sportradar, there are additional InvestingPro Tips available, providing a deeper dive into the company's financials and market performance. Investors can explore these tips further at InvestingPro to inform their investment decisions.

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