Genius Sports shares decline amid CFTC rule changes
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jul 24 2024
0mins
Should l Buy GENI?
Source: Business Insider
Genius Sports Ltd shares fell 6.27% and hit a 20-day low amid a broader market decline, with the Nasdaq-100 down 1.23% and the S&P 500 down 0.35%.
The CFTC announced new rules for prediction markets, which could potentially benefit sports-related companies. However, despite this policy shift aimed at reducing market uncertainty, Genius Sports did not see a rally in its stock price, reflecting cautious market sentiment towards the sector. Other companies like DraftKings and Flutter Entertainment also experienced mixed reactions, indicating a lack of confidence among investors.
This development suggests that while regulatory changes may provide a more stable environment for prediction markets, investor sentiment remains cautious, impacting stock performance in the sports sector.
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Analyst Views on GENI
Wall Street analysts forecast GENI stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for GENI is 16.00 USD with a low forecast of 13.00 USD and a high forecast of 20.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
12 Buy
1 Hold
0 Sell
Strong Buy
Current: 6.190
Low
13.00
Averages
16.00
High
20.00
Current: 6.190
Low
13.00
Averages
16.00
High
20.00
About GENI
Genius Sports Limited is the official data, technology and broadcast partner that powers the ecosystem connecting sports, betting and media. It operates through one segment, which consists of providing access to Betting Content Technology, Content and Services; Media Technology Content and Services; and Sports Technology and Services. It builds and supplies technology and services that allow sports leagues to collect, analyze and monetize their data with added tools to deepen fan engagement. It provides sports leagues with bespoke monitoring technology and education services to help protect their competitions and athletes from the threats of match fixing and betting-related corruption. It offers official data, outsourced bookmaking, trading/risk management services and live audio-visual game content that is derived from its streaming partnerships with sports leagues. Its offerings include Live sports data, Pre-game and in-game odds feeds, and BetVision, among others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Genius Sports Announces $1.2 Billion Acquisition of Legend
- Deal Details: Genius Sports announced the acquisition of Legend for up to $1.2 billion, with $900 million payable at closing and an earnout of $300 million, which is expected to immediately enhance group adjusted core profit margins and free cash flow conversion.
- Revenue Outlook: The company anticipates preliminary group revenue of $669 million for FY25, reflecting a 31% year-on-year growth, and expects FY26 revenue to reach approximately $810-820 million, indicating strong growth potential.
- Financial Targets: Post-acquisition, Genius Sports expects to achieve approximately $1.1 billion in group revenue and $320-330 million in adjusted core profit in 2026, with an anticipated free cash flow conversion rate of about 50%, driving long-term growth.
- Market Reaction: Despite the strategic nature of the deal, Genius Sports' shares plunged 26.5% following the announcement, reflecting market concerns about the acquisition, with the stock down 34% over the past 12 months.
See More
Genius Sports' Acquisition of Legend Triggers Stock Plunge
- Massive Acquisition Deal: Genius Sports announced its acquisition of digital sports and gaming media network Legend for up to $1.2 billion, including $800 million in cash and $100 million in stock, which represents 80% of its $1.5 billion market cap, raising concerns about its financial health.
- Profitability Concerns: Despite the large deal size, Genius Sports has yet to achieve profitability, leading to a 23% drop in stock price following the announcement, as investors express skepticism about its future earnings potential.
- Optimistic Business Integration: With Legend's array of media brands and premium content partnerships with Yahoo! Sports and Sports Illustrated, the combined company is expected to see sales double from $669 million in 2025 to $1.6 billion by 2028, indicating strong market potential.
- NFL Stake Boosts Confidence: Given that the NFL holds a 10% stake in Genius Sports and has an exclusive partnership through 2029, there remains optimism about Genius Sports' long-term prospects, with expectations of generating $160 million in free cash flow in 2026.
See More
Genius Sports to Acquire Legend in $1.2 Billion Deal
- Acquisition Overview: Genius Sports announced an agreement to acquire Legend for up to $1.2 billion, with $900 million payable at closing, consisting of $800 million in cash and $100 million in stock, plus a potential earnout of up to $300 million tied to profitability and cash flow targets, expected to close in Q2 2026.
- User Base Integration: In 2025, Legend attracted 320 million annual visits from 118 million unique users, with over two-thirds returning regularly, and this acquisition is expected to integrate this highly engaged sports and gaming audience into Genius Sports' media ecosystem, providing a reliable revenue stream.
- Enhanced Financial Outlook: The acquisition is projected to be immediately accretive to adjusted EBITDA margins and free cash flow conversion, supporting a revenue CAGR of at least 20% from 2026 to 2028, with the combined company expected to achieve approximately $1.1 billion in revenue and $320–330 million in adjusted EBITDA for 2026.
- Market Transformation Potential: CEO Mark Locke stated that the acquisition will drive higher margins and stronger free cash flow, positioning Genius Sports to immediately transform the market and grow the size and scale of its business, with projected revenue reaching $1.6 billion by 2028 and an adjusted EBITDA margin of around 35%.
See More
Genius Sports Acquires Legend for Up to $1.2B
- Large Transaction Value: Genius Sports announced the acquisition of digital sports and gaming media network Legend for up to $1.2 billion, with $900 million payable at closing and an additional $300 million earnout, reflecting the company's confidence in future growth.
- Strong User Base: In 2025, Legend achieved 320 million annual visits from 118 million unique visitors, with over two-thirds of users returning regularly, providing Genius Sports with rich user data and potential revenue streams.
- Significant Financial Impact: The acquisition is expected to be immediately accretive to the company's adjusted EBITDA margins and free cash flow conversion while maintaining at least a 20% CAGR in group revenue, indicating a robust financial outlook.
- Accelerated Strategic Goals: Genius Sports CEO Mark Locke stated that this deal accelerates the company's strategic and financial objectives, enhances fan monetization, and builds a fully integrated sports and gaming media network, driving higher margins and stronger cash flow.
See More
Genius Sports Acquires Legend for Up to $1.2 Billion
- Acquisition Scale: Genius Sports has announced the acquisition of Legend for up to $1.2 billion, with $900 million payable at closing and an additional $300 million contingent on achieving profitability and cash flow targets, expected to immediately enhance Group Adjusted EBITDA margins and Free Cash Flow conversion.
- Financial Outlook: Post-acquisition, Genius Sports anticipates achieving approximately $1.1 billion in Group Revenue and $320-330 million in Group Adjusted EBITDA in 2026, with a Free Cash Flow conversion rate of about 50%, indicating strong growth potential and profitability.
- User Base Expansion: In 2025, Legend attracted 320 million visits from 118 million unique visitors, with over two-thirds returning regularly, and this acquisition will bring a highly engaged sports and gaming audience into Genius Sports' media ecosystem, enhancing revenue predictability.
- Strategic Integration Advantage: Through the FANHub platform, Genius Sports will integrate over 2,000 sports, media, and betting partners, enhancing user experience and accelerating fan monetization, further solidifying its leadership position in the global sports and gaming media network.
See More
CFTC Announces New Rules for Prediction Markets
- Major Policy Shift: CFTC Chairman Michael S. Selig announced the drafting of 'clear rules' and the withdrawal of proposals prohibiting sports and political contracts, aiming to eliminate market uncertainty and support lawful innovation.
- Clarification of Rules: Selig noted that the existing framework has proven difficult to apply, and the CFTC will establish 'clear standards' to improve the management of event contracts, ensuring the legal rights of market participants.
- Legal Scrutiny Context: Amid increased legal scrutiny from state regulators on prediction markets, Coinbase has filed lawsuits against Michigan, Illinois, and Connecticut, seeking to confirm the CFTC as the sole regulator of these markets.
- Market Reaction Mixed: Despite the potential positive impact of the CFTC's new rules, stocks of sports-related companies like Genius Sports did not rally, while shares of DraftKings and Flutter Entertainment showed mixed signals, indicating cautious market sentiment.
See More
Genius Sports Announces $1.2 Billion Acquisition of Legend
- Deal Details: Genius Sports announced the acquisition of Legend for up to $1.2 billion, with $900 million payable at closing and an earnout of $300 million, which is expected to immediately enhance group adjusted core profit margins and free cash flow conversion.
- Revenue Outlook: The company anticipates preliminary group revenue of $669 million for FY25, reflecting a 31% year-on-year growth, and expects FY26 revenue to reach approximately $810-820 million, indicating strong growth potential.
- Financial Targets: Post-acquisition, Genius Sports expects to achieve approximately $1.1 billion in group revenue and $320-330 million in adjusted core profit in 2026, with an anticipated free cash flow conversion rate of about 50%, driving long-term growth.
- Market Reaction: Despite the strategic nature of the deal, Genius Sports' shares plunged 26.5% following the announcement, reflecting market concerns about the acquisition, with the stock down 34% over the past 12 months.
See More
Genius Sports' Acquisition of Legend Triggers Stock Plunge
- Massive Acquisition Deal: Genius Sports announced its acquisition of digital sports and gaming media network Legend for up to $1.2 billion, including $800 million in cash and $100 million in stock, which represents 80% of its $1.5 billion market cap, raising concerns about its financial health.
- Profitability Concerns: Despite the large deal size, Genius Sports has yet to achieve profitability, leading to a 23% drop in stock price following the announcement, as investors express skepticism about its future earnings potential.
- Optimistic Business Integration: With Legend's array of media brands and premium content partnerships with Yahoo! Sports and Sports Illustrated, the combined company is expected to see sales double from $669 million in 2025 to $1.6 billion by 2028, indicating strong market potential.
- NFL Stake Boosts Confidence: Given that the NFL holds a 10% stake in Genius Sports and has an exclusive partnership through 2029, there remains optimism about Genius Sports' long-term prospects, with expectations of generating $160 million in free cash flow in 2026.
See More
Genius Sports to Acquire Legend in $1.2 Billion Deal
- Acquisition Overview: Genius Sports announced an agreement to acquire Legend for up to $1.2 billion, with $900 million payable at closing, consisting of $800 million in cash and $100 million in stock, plus a potential earnout of up to $300 million tied to profitability and cash flow targets, expected to close in Q2 2026.
- User Base Integration: In 2025, Legend attracted 320 million annual visits from 118 million unique users, with over two-thirds returning regularly, and this acquisition is expected to integrate this highly engaged sports and gaming audience into Genius Sports' media ecosystem, providing a reliable revenue stream.
- Enhanced Financial Outlook: The acquisition is projected to be immediately accretive to adjusted EBITDA margins and free cash flow conversion, supporting a revenue CAGR of at least 20% from 2026 to 2028, with the combined company expected to achieve approximately $1.1 billion in revenue and $320–330 million in adjusted EBITDA for 2026.
- Market Transformation Potential: CEO Mark Locke stated that the acquisition will drive higher margins and stronger free cash flow, positioning Genius Sports to immediately transform the market and grow the size and scale of its business, with projected revenue reaching $1.6 billion by 2028 and an adjusted EBITDA margin of around 35%.
See More
Genius Sports Acquires Legend for Up to $1.2B
- Large Transaction Value: Genius Sports announced the acquisition of digital sports and gaming media network Legend for up to $1.2 billion, with $900 million payable at closing and an additional $300 million earnout, reflecting the company's confidence in future growth.
- Strong User Base: In 2025, Legend achieved 320 million annual visits from 118 million unique visitors, with over two-thirds of users returning regularly, providing Genius Sports with rich user data and potential revenue streams.
- Significant Financial Impact: The acquisition is expected to be immediately accretive to the company's adjusted EBITDA margins and free cash flow conversion while maintaining at least a 20% CAGR in group revenue, indicating a robust financial outlook.
- Accelerated Strategic Goals: Genius Sports CEO Mark Locke stated that this deal accelerates the company's strategic and financial objectives, enhances fan monetization, and builds a fully integrated sports and gaming media network, driving higher margins and stronger cash flow.
See More
Genius Sports Acquires Legend for Up to $1.2 Billion
- Acquisition Scale: Genius Sports has announced the acquisition of Legend for up to $1.2 billion, with $900 million payable at closing and an additional $300 million contingent on achieving profitability and cash flow targets, expected to immediately enhance Group Adjusted EBITDA margins and Free Cash Flow conversion.
- Financial Outlook: Post-acquisition, Genius Sports anticipates achieving approximately $1.1 billion in Group Revenue and $320-330 million in Group Adjusted EBITDA in 2026, with a Free Cash Flow conversion rate of about 50%, indicating strong growth potential and profitability.
- User Base Expansion: In 2025, Legend attracted 320 million visits from 118 million unique visitors, with over two-thirds returning regularly, and this acquisition will bring a highly engaged sports and gaming audience into Genius Sports' media ecosystem, enhancing revenue predictability.
- Strategic Integration Advantage: Through the FANHub platform, Genius Sports will integrate over 2,000 sports, media, and betting partners, enhancing user experience and accelerating fan monetization, further solidifying its leadership position in the global sports and gaming media network.
See More
CFTC Announces New Rules for Prediction Markets
- Major Policy Shift: CFTC Chairman Michael S. Selig announced the drafting of 'clear rules' and the withdrawal of proposals prohibiting sports and political contracts, aiming to eliminate market uncertainty and support lawful innovation.
- Clarification of Rules: Selig noted that the existing framework has proven difficult to apply, and the CFTC will establish 'clear standards' to improve the management of event contracts, ensuring the legal rights of market participants.
- Legal Scrutiny Context: Amid increased legal scrutiny from state regulators on prediction markets, Coinbase has filed lawsuits against Michigan, Illinois, and Connecticut, seeking to confirm the CFTC as the sole regulator of these markets.
- Market Reaction Mixed: Despite the potential positive impact of the CFTC's new rules, stocks of sports-related companies like Genius Sports did not rally, while shares of DraftKings and Flutter Entertainment showed mixed signals, indicating cautious market sentiment.
See More
