Genius Sports Seen Benefiting From Higher Ad Spend in H2, Oppenheimer Says

MT Newswires Live07-31

Genius Sports (GENI) could see significantly higher advertising spending by prediction market operators in H2, which is expected to benefit its Media segment, Oppenheimer said in a note emailed Friday.

A key catalyst is the Commodity Futures Trading Commission taking a "hands-off" regulatory approach towards the prediction markets, which enables operators to expand the range and variety of sports markets they offer. This lets the operators generate higher unit revenue, and in turn, boost their threshold for customer acquisition costs, according to the note.

Furthermore, approval for designated contract market licenses have been cut to five to seven months, compared with 24 months previously, increasing the number of participants in the market who will spend on advertising, Oppenheimer said.

These factors boost the upside of Genius Sports' financial results, especially for the organic growth rate of the Legends media network, even as the World Cup likely drove strong player volumes to prediction market operators, the analysts added.

Oppenheimer maintained the company's stock rating at outperform and increased the price target to $10 from $9.

Price: 6.91, Change: -0.07, Percent Change: -1.00

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