- Needham Analyst Bernie McTernan reiterated a Buy rating on the shares of Genius Sports Ltd GENIUS with a Price target of $7.
- The analyst noted that the next phase of second spectrum technology should deepen GENI’s moat and provide revenue/cost savings opportunities while driving the convergence of sportsbook and sports media.
- Last week, GENI hosted a tech demo shows the next phase of Second Spectrum, which improves the quality and quantity of the data collected.
- The analyst mentioned that the mesh technology collects 7,000 data points per player, up from 20-25 previously.
- The result is a digital recreation that should be indistinguishable from a regular broadcast, allowing for significant viewer personalization and revenue opportunities such as dynamic insertion of advertisements at key moments and more bets with better odds, including a better in-game betting experience.
- In terms of cost savings, the technology will enable automated data collection, the analyst noted.
- The technology could help GENI secure future rights deals with key stakeholders using this technology, potentially making Genius Sports the preferred data partner.
- GENI is taking three broad actions to collect official data, increase media revenue and bet acceptance rate, the analyst added.
- The company plays a crucial role in the sports betting process by facilitating the transfer of data from sports leagues to sportsbooks, and should benefit from the rising tide of sports betting around the world, regardless of sportsbook market share and customer acquisition costs, the analyst said.
- The analyst believes that GENI will be able to control the relative pricing power of its suppliers and end markets due to its exclusive data, which is becoming increasingly valuable, and due to additional revenue streams from its customers such as ad-tech and streaming.
- price action: GENI shares trade 6.87% lower at $4.20 on latest check Monday.
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