Genius Sports (GENI) Stock Forecast & Price Target

Genius Sports Ltd. is poised for significant financial growth, particularly in its Media Technology division, which is expected to achieve a gross margin expansion of 440 basis points by 2028, contributing to robust revenue performance driven by higher programmatic advertising services, especially from the NFL. The company's adjusted EBITDA margin is anticipated to improve by 190 basis points, reflecting efficient cost management and operating leverage, alongside projections for strong Media revenue growth at approximately 30% year-over-year in the current year. Furthermore, free cash flow is forecasted to increase at a compound annual growth rate of 75% through 2028, supported by substantial gains in operating cash flow and a modest rise in capital expenditures, facilitating a rise in free cash flow conversion to over 57% by 2028.

Genius Sports Ltd has experienced a decline in its 3Q EBITDA margin, falling 90 basis points year-over-year to 20%, primarily due to timing issues related to contract wins and new sportsbook contracts. The company's financial performance is further challenged by a decrease in the percentage of wagers placed with legal operators in Illinois following a tax rate increase, coupled with lower-than-expected global sports betting gross gaming revenue, which could indicate declining consumer spending or restricted market access. Additionally, rising costs, particularly in cost of goods sold (COGS), along with the pressure on operators to achieve growth targets through expensive promotions that erode margins, contribute to a negative outlook for the company's financial stability.