After Last Month’s IPO, is Sportradar (SRAD) a Good Investment?

Since the Supreme Court returned the power to legalize sports gambling back to the states, the U.S. has seen a boom to the industry that shows no signs of slowing down. In the month of September, New Jersey’s sportsbook took in $1 billion in bets, becoming the…

first state to ever eclipse this mark. Just the online segment of the industry was valued at over $2 billion in the US for 2020, and this figure is expected to grow at a CAGR of 17.34% from 2021-2026. This increasing legalization of sports betting in the U.S. has opened the door for new, innovative companies to take advantage and cater to this growing market.

Sportradar Group AG (SRAD) is a Swiss-based technology provider of business-to-business (B2B) solutions to the global sports betting industry. It’s platform offers integrated sports data and technology platforms that simplify its customers’ operations, drive efficiencies and improve fan experiences. SRAD’s software solutions address the sports betting value chain from traffic generation and advertising technology to the collection, processing, and extrapolation of data and odds.

In this article, I will analyze SRAD’s fundamentals to identify if the sport betting data provider is a good investment after the company’s recent IPO.

Since its listing last month on the NASDAQ, SRAD shares declined moderately and are down 6.9%, underperforming its benchmark, the iShares Expanded Tech-Software Sector ETF (IGV), which advanced slightly, up 3.38% during the corresponding period.

The fundamentals of the sports betting data provider are improving, which is constructive for SRAD’s long term prospects

The company’s net sales are expected to grow at a rapid pace in the coming years. SRAD’s top line is estimated to advance double-digit in the next two years, lifting by 21.7% to €673m in 2022 and raising by 19.1% to €807m in 2023.

On the other hand, even if the sport betting company does post a declining bottom line in 2021, down 6.57% year-on-year to €14.2m, SRAD’s net earnings should provide some bounce. In the next two years, the company’s earnings are expected to jump by more than 2x in 2022 to €49.2m and advance rapidly in 2023, up 68.6% to €83m.

In addition, SRAD posts a…

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