Shares of Sportradar Group AG ( NASDAQ: SRAD ) broke out this week with a 7% net gain after the company's earnings report and conference call updates recharged the bull thesis. SRAD tacked on another 2% in the premarket session on Friday.
Despite a negative EBITDA margin in Q2, Sportradar ( SRAD ) execs highlighted that the margin performance continues to improve each quarter.
"This performance improvement is ahead of our expectation and bodes well with our long-term plan of building an attractive profitable U.S. business. This operating leverage we are seeing is a balance of accelerating revenues, streamlining the organization and cost optimization," noted CEO Carsten Koerl on the earnings call.
Koerl said it is estimated that SRAD handled over €8B in transactions in the first half of the year alone and remains on track to handle between €17B to €20B of transactions in 2022. He said that would make the company one of the top five bookmakers in the world, including DraftKings ( DKNG ) and FanDuel as a comparison.
On Wall Street, Needham reiterated a Buy rating and raised its price target to $17 after taking in the report. Analyst Bernie McTernan and team said they like SRAD's balance of growth and profitability with its mature and profitable ROW business funding investment in the US. SRAD is noted to be expanding its relationship with OSB operators including driving higher value services in ROW betting. While margins underperformed in Q2 due in part to Russia, the tailing off is said to create an easy comparison for next year, especially as SRAD's US investment trajectory continues to improve.
Dig into the Sportradar Group earnings call transcript.
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Sportradar powers higher as accelerating revenue leads to margin improvement