SRAD: Share Buybacks And Core Media Strength Will Drive Returns Ahead

Analysts have modestly reduced their average price target on Sportradar Group, trimming fair value expectations by less than $1 to reflect slightly higher discount rates and a marginally lower long term profit margin outlook, while remaining encouraged by solid core momentum, improving media traction, and longer term upside from prediction markets.

Analyst Commentary

Recent Street commentary reflects a generally constructive stance on Sportradar's long term growth profile, even as near term expectations are calibrated lower. Analysts are fine tuning models following the latest quarterly update, leading to modest price target reductions without a shift in overall positive ratings.

Bullish Takeaways

• Bullish analysts continue to recommend the shares, arguing that the recent pullback has overreacted to a muted growth outlook and now offers an attractive entry point relative to long term earnings power.
• Updates to models incorporate better visibility into 2025 guidance, with particular confidence in the durability of the core data and integrity business, which is seen as a key driver of margin expansion over time.
• The strengthening media segment, including improved traction with rights holders and distribution partners, is viewed as a structural growth engine that can support sustained double digit revenue growth.
• Optionality from prediction markets and the integration of acquired assets is seen as underappreciated in current valuation multiples, providing upside if execution remains disciplined.

Bearish Takeaways

• Bearish analysts are concerned that the near term growth outlook appears subdued relative to prior expectations, warranting higher discount rates and slightly lower long term margin assumptions in valuation models.
• There is caution that integration and scaling of new assets, including recent acquisitions, could pressure execution and delay the realization of anticipated synergies.
• Some investors worry that competitive intensity in sports data and media could limit pricing power, constraining upside to revenue per client and delaying operating leverage.
• The modest, but broad based trimming of price targets underscores a view that Sportradar must demonstrate more consistent quarterly delivery before the market is willing to re rate the stock toward prior valuation highs.

What's in the News

• The Bear Cave published a cautious report arguing investors may overestimate Sportradar's moat and business quality while underestimating growing competition, prediction market headwinds, and reputational risk related to alleged facilitation of crooked gambling (periodical).
• Cboe Global announced plans to launch federally regulated prediction markets that will initially exclude sports products. This highlights rising competition and regulatory focus in adjacent markets relevant to Sportradar's long term opportunity set (periodical).
• Sportradar raised its fiscal 2025 guidance and now expects revenue of at least €1,290 million, implying year on year growth of at least 17%. This reinforces management's stated confidence in the growth outlook despite heightened scrutiny (key development).
• The company increased its equity buyback authorization by $100 million to a total of $300 million, indicating continued capital return and signaling that management views the shares as undervalued (key development).
• Underdog became the first U.S. operator to adopt Sportradar's Bettor Sense AI powered responsible gaming solution, expanding the firm's footprint in player protection technology and supporting its integrity focused brand positioning (key development).

Valuation Changes

• Fair Value has risen slightly, moving from €32.92 to approximately €33.00 per share. This reflects a modest uplift in long term valuation assumptions.
• The Discount Rate has increased slightly from about 7.79 percent to 7.86 percent, indicating a marginally higher required return applied to future cash flows.
• Revenue Growth remains essentially unchanged, ticking up fractionally from 17.71 percent to 17.71 percent and signaling stable top line expectations.
• The Net Profit Margin has edged down slightly from roughly 15.81 percent to 15.79 percent, implying a modestly more conservative long term profitability outlook.
• The Future P/E has declined slightly from 34.0x to about 33.8x, suggesting a small compression in the multiple investors are expected to pay for forward earnings.