Posted on: October 14, 2024, 04:05h.
Last updated on: October 14, 2024, 04:05h.
Genius Sports (NYSE: GENI) announced today it reached an agreement with the Los Angeles Rams under which it will provide highlights supported by Next Gen Stats (NGS) during the team’s home games at SoFi Stadium.
The highlights will be shown on SoFi’s famed Infinity Screen — one of the largest in-stadium screens anywhere in the US.
These highlights, powered by GeniusIQ, Genius Sports’ next generation data and artificial intelligence platform will include crucial NGS insights such as player locators and speeds, time for the quarterback to throw and a complete minimap,” according to a statement issued by the sports betting data provider.
Genius is the official data provider of the NFL.
Why Rams Deal Matters to Genius
Shares of Genius gained 3% today on volume that was more than double the daily average and a case can be made that news of the Rams deal played a part in that rally.
Typically, betting companies’ agreements with teams aren’t needle movers in the eyes of investors, but the Genius/Rams accord could be a departure from that theme because it shows the technology firm’s efforts to diversify beyond sports betting and leverage artificial intelligence (AI) are paying off.
In July, Genius inked a deal with social media platform X, formerly Twitter, that calls for X to use “Trend Genius” to better serve advertisements. Trend Genius uses AI to gain insight into what X users are posting about and then serves ads that are pertinent to those conversations. At SoFi Stadium, Genius will tap technology to make complex football concepts more digestible and appealing to fans of all knowledge levels.
“GeniusIQ applies powerful machine learning and AI to translate huge volumes of NGS data into a semantic understanding of football. It then powers real-time insights and brand activations, creating meaningful connections with fans when the on-field action is at its most compelling,” according to the statement.
Analysts Remain Bullish on Genius Sports
Up 26.21% year-to-date, Genius is easily one of 2024’s best-performing small-cap gaming equities, but some analysts believe the stock has more upside in store. In a new report to clients, B. Riley analyst David Bain reiterated a “buy” rating on Genius.
“In our opinion, there is clear momentum in its betting division staging near-term potential earnings outperformance,” noted the analyst. “GENI framed a possibly even larger growth opportunity in its media division. Following our meeting, we believe GENI’s media earnings before interest, taxes, depreciation, and amortization (EBITDA) growth potential is both under-modeled and misunderstood, and media is positioned as a significant upside lever in forward periods.”
Bain added the company’s FANHub offering could be a “breakthrough” for its media division. His $10 price target on the stock implies upside of 27.3% from today’s closing price.
