Sports Betting Expansion And Real-time Data Will Shape Future Markets

Key Takeaways

• Expanding global sports betting markets and rising demand for advanced data solutions are driving recurring revenue growth and margin expansion.
  
• Deeper client integration, premium product adoption, and strategic sports rights deals increase retention, pricing power, and earnings quality.
  
• Intensifying competition, regulatory risks, and rising costs threaten Sportradar's revenue stability, profitability, and negotiating strength as sports data becomes increasingly commoditized.

Catalysts

Provides sports data services for the sports betting and media industries in Switzerland, the United States, North America, Africa, the Asia Pacific, the Middle East, Europe, Latin America, and the Caribbean.

• Continued global legalization and expansion of sports betting, particularly ongoing rapid growth in the U.S., Brazil, and emerging APAC markets, are expanding Sportradar's total addressable market and underpinning robust, recurring revenue growth.
  
• Increasing demand for advanced, real-time sports data, in-play betting, and micro markets is driving greater adoption of premium, higher-margin products like MTS and 4Sight, supporting both revenue acceleration and EBITDA margin expansion.
  
• Deepening integration with clients and cross-selling/upselling a broader suite of products-evidenced by 40% of clients now using four or more Sportradar products-boosts take rates, retention and generates high-quality, recurring revenue, positively impacting earnings growth.
  
• Investment in AI-driven analytics, automated content generation, and operational efficiencies is increasing developer productivity, accelerating product time-to-market, and lowering costs, which should further support sustained margin expansion and cash flow generation.
  
• Acquisition of IMG's sports rights and ongoing long-term data rights partnerships secure multi-year revenue visibility and premium pricing power, enhancing top-line growth and earnings quality.

Sportradar Group Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Sportradar Group's revenue will grow by 15.5% annually over the next 3 years.
• Analysts assume that profit margins will increase from 9.2% today to 14.3% in 3 years time.
• Analysts expect earnings to reach €262.9 million (and earnings per share of €0.82) by about September 2028, up from €109.6 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting €303.7 million in earnings, and the most bearish expecting €168.4 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 49.5x on those 2028 earnings, down from 71.4x today. This future PE is greater than the current PE for the US Hospitality industry at 24.0x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.91%, as per the Simply Wall St company report.

Sportradar Group Future Earnings Per Share Growth

Risks

• Increasing competition from both established players and sports leagues directly entering the data distribution market (e.g., European league data rights previously held by IMG lost due to unprofitable deals) may pressure Sportradar's pricing power and reduce onboarding fee opportunities, negatively impacting future revenue and net margins.
  
• Ongoing margin compression risk exists as Sportradar continues to invest heavily in technology, AI, and acquisitions (e.g., pending IMG Arena acquisition), which could increase R&D and personnel costs faster than revenue growth if market expansion slows, potentially eroding net margins and earnings.
  
• Overdependence on long-term contracts and content rights for key sports (e.g., ATP, MLB, Bundesliga) creates vulnerability should these leagues renegotiate, reprice, or internalize their data distribution, which could lead to revenue instability or declines if exclusivity is lost.
  
• Regulatory uncertainties and potential changes-such as evolving tax treatment, data privacy laws, or restrictions on betting advertising and operations-especially in emerging markets like Brazil, Thailand, or the U.S., may increase compliance costs and limit the addressable market, putting downward pressure on both revenue growth and net margins.
  
• The growing commoditization of sports data and potential for technological disintermediation (e.g., rapid advancement in AI-driven direct-to-consumer betting tools or sports analysis) might diminish Sportradar's value proposition to operators and media firms, threatening medium-to-long-term take rates, revenue, and earnings growth.

Valuation

• The analysts have a consensus price target of $32.974 for Sportradar Group based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $38.85, and the most bearish reporting a price target of just $26.18.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €1.8 billion, earnings will come to €262.9 million, and it would be trading on a PE ratio of 49.5x, assuming you use a discount rate of 7.9%.
• Given the current share price of $30.52, the analyst price target of $32.97 is 7.4% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.