Analyst B. Riley Securities has released a report that recommends investing in stock from Genius Sports.
The company recently extended its data rights deal with the NFL, along with two option years with the organization.
The amended agreement gives Genius Sports exclusive official data rights that will last through Super Bowl 2028.
Under the previous contract, Genius Sports maintained data rights to the brand for a four-year period, with the option for another two option years.
B. Riley Securites summarized its findings by noting that the NFL contract extension addresses previous investment concerns.
The group said in an official statement, “We believe the agreement removes a key renewal concern for investors and further validates GENI's technology-led business strategy.
“Today's NFL extension, coupled with its recent UK Football extension and recent showcase of operating leverage/earnings momentum negate primary investor concerns, in our view.”
The company went on to point out potential risks involved and noted that the US sports betting market could have significant effects on stock prices. B. Riley Securities concluded by saying, “The cost of official data rights from leagues and federations could rise significantly.
"If so, it would impact our cost analysis and negatively impact GENI's stock price, in our view. However, we note the league and federations also benefit from GENI or competitor relationships for league data, and we assume costs of data rights remain rational.
“Our estimates are reliant on a certain percentage of the US population having access to online sports wagering. If this does not materialize, it would be detrimental to our earnings outlook and stock thesis.”
In addition to the extension, Genius Sport recently launched free-to-play games via its collaboration with several NFL teams, such as the Denver Broncos, Indianapolis Colts, Las Vegas Raiders and Los Angeles Rams.
