Sportradar Group AG: Hold Rating Affirmed Amidst Stable Growth and Buyback Program, Balanced by Growth Uncertainties

Morgan Stanley analyst Stephen Grambling maintained a Hold rating on Sportradar Group AG (SRAD – Research Report) today and set a price target of $11.00.

Stephen Grambling has given his Hold rating due to a combination of factors including Sportradar Group AG’s fourth quarter performance and future financial outlook. The company’s earnings were consistent with Morgan Stanley’s expectations and consensus, showing a stable revenue and EBITDA growth year-over-year. The guidance provided for 2024 aligns closely with consensus estimates, indicating a steady growth trajectory for revenue and EBITDA. Additionally, Sportradar’s initiation of a $200 million buyback program reflects a positive signal regarding the company’s strong fundamentals and management’s confidence in its capacity for long-term profitability and cash flow.

The buyback is anticipated to instill further investor confidence, especially considering the guidance for approximately 20% annual growth in profitability. Sportradar’s stock valuation appears reasonable given its future EBITDA projections, trading at roughly 15 times 2024 consensus EBITDA. This valuation takes into account the company’s organizational restructuring and the absorption of initial costs from new contracts. However, certain uncertainties remain, such as the specifics of revenue and EBITDA growth by segment and region, the impact of potential new contracts or renegotiations, and the progression of sports rights costs and U.S. profitability. These factors likely contribute to the Hold rating as they present a balanced view of potential growth against existing risks and unknowns.

According to TipRanks, Grambling is a 4-star analyst with an average return of 4.4% and a 54.59% success rate. Grambling covers the Consumer Cyclical sector, focusing on stocks such as Boyd Gaming, MGM Resorts, and Hyatt Hotels.

In another report released today, Jefferies also maintained a Hold rating on the stock with a $10.00 price target.

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Sportradar Group AG (SRAD) Company Description:

Sportradar Group AG is a technology platform enabling next-generation engagement in sports, and a provider of B2B solutions to the global sports betting industry. It generates revenue through two primary sources: subscription-based revenue and revenue sharing.