Genius Sports (GENI): Evaluating Valuation After Share Drop on Kalshi’s New Betting Product

Genius Sports (NYSE:GENI) saw its stock fall sharply after competitor Kalshi launched a new parlay betting product. This development sparked fresh competition and prompted investors to reexamine the company's position in the rapidly shifting sports betting market.

See our latest analysis for Genius Sports.

This competitive shakeup comes on the heels of several other notable moves by Genius Sports, including a planned shift to a new auditor, KPMG, as the company matures. In a broader context, the stock’s recent 1-year total shareholder return of 0.6% suggests momentum has slowed after a period of rapid growth. Management’s ongoing platform investments may set the stage for new opportunities ahead.

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With the stock pulling back in the face of heightened competition, the key question now is whether Genius Sports is trading below its true value or if markets have already priced in expectations for future growth.

Most Popular Narrative: 19.1% Undervalued

The narrative estimates a fair value for Genius Sports nearly 19% above its last close, pointing to a much stronger valuation if ambitious projections unfold. The market may be overlooking the scale of upside built into this scenario.

Ongoing expansion of global sports betting legalization and regulation, particularly in large markets like the U.S., Europe, Brazil and other emerging regions, is increasing the addressable market for official sports data and media platforms. This positions Genius Sports for durable multi-year revenue growth and geographic diversification.

Read the complete narrative.

Curious what powers this bold valuation call? It is not just revenue growth. The forecast banks on margin expansion and a profit multiple reserved for market leaders. The model's confidence rests on key financial forces you may not expect. Find out what justifies such a premium price target.

Result: Fair Value of $14.76 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, renewed competition from tech giants or tougher terms in league data rights agreements could quickly pressure both Genius Sports’ earnings and long-term growth outlook.

Find out about the key risks to this Genius Sports narrative.

Another View: Market Multiples Tell a Different Story

Looking from another angle, Genius Sports is trading at a price-to-sales ratio of 5.1x, much higher than the US Hospitality industry average of 1.7x and the peer average of 1.6x. Compared to a fair ratio of 1.7x, this premium suggests investors are paying up for future growth that is not yet proven. Is the optimism warranted, or could the market eventually revert to more typical valuation levels?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Genius Sports Narrative

If you see things differently or want to test your own take, you can dive in and build a personal Genius Sports outlook in minutes. Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Genius Sports.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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