Needham repeats analyst Bernie McTernan Genius Sports Ltd GENIUS with a Buy and a price target of $7.

GENI grew Sales up ~25% Y/Y in 4Q22. The company rode the wave of growth in the US OSB market, with US handle up 40% and, importantly, in-play bet handle and GGR growing 50% and 60%, respectively.

However, the forecast calls for revenue growth of 15% in FY23, slightly below the analyst’s expectations of +19%.

Betting technology revenue is likely to be the key growth driver, beating analyst expectations, but the media revenue guide missed expectations. However, this appears to be primarily a complex comparison function in 1H, with 2H returning to strong growth of almost 30%.

Despite the lower FY23 guidance, the analyst remains bullish on the long-term media opportunity as a measurable way for sportsbooks to find customers.

Adjusted EBITDA and FY23 guidance for Q4’22 came in slightly above analyst expectations. GENI continues to demonstrate discipline in managing operating expenses and expects non-GAAP operating expenses to decrease slightly in FY23 from FY22.

The gross margin guidance also came in ahead of analyst expectations on lower rights fees and media COGS.

The day before the result, GENI announced expanded partnership with the NBA leveraging Second Spectrum to create a next-generation platform.

The analyst believes this is another example of GENI being a strong and differentiated technology partner to the leagues, and their watch and bet deal with the NFL is another example.

Ultimately, being an excellent partner for the leagues should help with future data rights negotiations and create a better customer experience that makes the leagues more attractive to fans.

CreditSuisse Analyst Benjamin Chaiken maintains an outperform and lowers price target to $8 from $10.

Implied FY23 EBITDA flow-through vs FY22 indicates lower than expected operating leverage, leading the analyst to cut FY24/FY25 EBITDA estimates. Purely based on…