• If you are wondering whether Genius Sports at US$4.35 is a bargain or a value trap, the starting point is to understand what the current share price is really pricing in.
• The stock has seen a 2.7% decline over the last week, a 4.6% decline over the last month and a 59.6% decline year to date, while the 1 year return is a 60.6% loss and the 5 year return is a 76.8% loss, with only the 3 year period showing an 8.2% gain.
• These moves sit against a backdrop of ongoing attention on sports data, betting technology and media rights. Investor expectations can shift quickly as new deals, partnerships or regulatory updates emerge. Recent headlines around the sector have tended to focus on contract wins, league tie ups or tech rollouts, which can influence how investors think about future revenue visibility and risk for companies like Genius Sports.
• Genius Sports currently has a valuation score of 3 out of 6, which means it screens as undervalued on half of the checks used here. The rest of this article will walk through the main valuation methods behind that score before finishing with a more complete way to think about what the stock might be worth.

Approach 1: Genius Sports Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model projects a company’s future cash flows and then discounts them back to today’s value so you can compare that figure with the current share price.

For Genius Sports, the latest twelve month free cash flow is about US$4.8 million. Using a 2 Stage Free Cash Flow to Equity model, the projections ramp up to an estimated US$649.1 million of free cash flow in 2035. Analyst inputs run through 2028, and the later years are extrapolated from those estimates by Simply Wall St.

When all those projected cash flows are discounted back to today, the model arrives at an estimated intrinsic value of US$29.42 per share. Compared with the current share price of US$4.35, that output implies the stock is about 85.2% undervalued based on these assumptions.

This highlights a large gap between what the cash flow model suggests and where the market is currently pricing Genius Sports.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Genius Sports is undervalued by 85.2%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.

Approach 2: Genius Sports Price vs Sales

For companies where profits are limited or volatile, the P/S ratio is often a useful way to think about value because it compares the share price to the revenue the business is already generating.

What investors are really deciding with any multiple is how much they are prepared to pay for each unit of sales or earnings, and that usually reflects expectations for future growth and the level of risk. Higher expected growth and lower perceived risk can support a higher “normal” multiple, while slower expected growth or higher uncertainty usually point to a lower one.

Genius Sports currently trades on a P/S ratio of 1.60x. That sits close to the Hospitality industry average P/S of 1.67x, and above the peer group average of 0.69x. Simply Wall St’s Fair Ratio framework estimates what a “justified” P/S should be, given factors like earnings growth, profit margins, market cap, risk profile and industry context. Because it blends these company specific inputs, it can be more tailored than a simple comparison with peers or the broad industry.

For Genius Sports, the Fair Ratio is 1.56x versus the current 1.60x, which points to the shares being about fairly priced on this measure.

Result: ABOUT RIGHT

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Upgrade Your Decision Making: Choose your Genius Sports Narrative

Earlier it was mentioned that there is an even better way to understand valuation, and that is where Narratives come in, because a Narrative lets you attach a clear story about Genius Sports to specific forecasts for revenue, earnings and margins, and then translate that story into a Fair Value that you can compare with today’s share price.

On Simply Wall St’s Community page, Narratives are set up so you can pick or adjust a view that matches your thinking, whether that is closer to the more optimistic fair value of about US$19.54 or the more cautious fair value of about US$11.37, and see how those different stories line up against the current price of around US$4.35.

Each Narrative ties together assumptions like revenue growth in a range of roughly 16.8% to 27.6%, profit margins that various analysts see landing anywhere from about 5.8% to 18.3%, and future P/E multiples between about 24.7x and 76.0x, then updates automatically as fresh news, earnings or guidance are added.

Used this way, Narratives give you a simple, visual bridge from “what you believe about Genius Sports” through to “what numbers those beliefs imply” so you can judge for yourself whether the gap between Fair Value and price looks wide enough to consider buying, trimming or simply watching the stock.

Do you think there's more to the story for Genius Sports? Head over to our Community to see what others are saying!

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.