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Genius Sports Limited's (NYSE:GENI) Path To Profitability

Simply Wall St ·  Jun 7 20:00

With the business potentially at an important milestone, we thought we'd take a closer look at Genius Sports Limited's (NYSE:GENI) future prospects. Genius Sports Limited engages in the development and sale of technology-led products and services to the sports, sports betting, and sports media industries. The US$1.1b market-cap company posted a loss in its most recent financial year of US$86m and a latest trailing-twelve-month loss of US$86m leading to an even wider gap between loss and breakeven. Many investors are wondering about the rate at which Genius Sports will turn a profit, with the big question being "when will the company breakeven?" Below we will provide a high-level summary of the industry analysts' expectations for the company.

Consensus from 12 of the American Hospitality analysts is that Genius Sports is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$32m in 2026. The company is therefore projected to breakeven around 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 75% is expected, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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NYSE:GENI Earnings Per Share Growth June 7th 2024

Given this is a high-level overview, we won't go into details of Genius Sports' upcoming projects, however, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we'd like to point out is that The company has managed its capital judiciously, with debt making up 0.006% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Genius Sports which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Genius Sports, take a look at Genius Sports' company page on Simply Wall St. We've also put together a list of essential factors you should further research:

  1. Valuation: What is Genius Sports worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Genius Sports is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Genius Sports's board and the CEO's background.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.

The above content is for informational or educational purposes only and does not constitute any investment advice related to Futu. Although we strive to ensure the truthfulness, accuracy, and originality of all such content, we cannot guarantee it.
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