Sports technology and fan engagement specialists lucky cola casino surprised investors last week with its $1.2 billion all-in acquisition of affiliate media and marketing technology company Legend. The move did not impress the market , though, as traders sent the stock price into a 28% tailspin, crashing from $8.51 to $6.19.
Listed on the NYSE but based in the UK, Genius Sports is unique in gaming, occupying the enviable space between leagues, teams, betting companies, and their audiences. It is the premier data, technology, and broadcast partner that connects media, sports, and betting in the burgeoning gaming ecosystem. Legend owns a wide array of sports media that, with its bespoke technology, has enabled it to become a significant marketing platform.
Genius’ services help power the user engagement efforts of its 400 or so B2B customers, including the NFL, Coca-Cola, BetMGM, and CBS, to more deeply monetize fans, customers, and players.
Still, the purchase has been derided as an overpayment for little more than a low-quality affiliate marketing company. On the face of it, it may look like that when considering the EBITDA multiples that Genius was willing to stump up.
Investors Leery in Wake of Acquisition
By our reckoning here at Gambling Insider, Genius Sports has paid 10x Legend’s trailing 12-month (TTM) EBITDA. That’s an eyewatering amount compared to Legend peers such as Gambling.com (GAMB), which trades at 3x EBITDA ($57.3 million TTM EBITDA on a market capitalization of $158.3 million).
Certainly, the losses are not encouraging for investors. In the fiscal year ending in December 2025, the company expects net profit to be negative again, at around $82.3 million.
Group-adjusted EBITDA reported in the preliminary financials accompanying news of the Legend acquisition was $136 million, ahead of the $120 million TTM EBITDA. EBITDA margin was 20%. It expects group revenue for FY2025 to be around $669 million, a year-on-year growth rate of 31%.
The company forecasts improvement across all of those financials in 2026, with revenue rising to $810-$820 million and EBITDA to $180-$190 million, for 22% and 36% improvements, respectively.
So what does Genius Sports CEO Mark Locke see in the Legend acquisition that the market doesn’t? The answer is a symbiotic fit that will drive up engagement and, in turn, profits.
Is the Market Being Unfair to Genius Sports? Good Time to Buy?
In a note to clients issued on Monday, Citizens Bank analyst Jordan Bender throws light on the matter. The upshot is that the recent price crash could be a gift for investors who may have overlooked this value opportunity sitting in plain sight.
Legend is much more than just a simple affiliate network. Bender describes how that symbiosis could work:
To put the relationship in simpler terms, Genius can leverage tier-one technology to track individuals across all Legend properties and its partners, with 320M annual visitors and 118M unique visitors, to see where individuals are clicking and scrolling.”
He illustrates how the combined entity’s tracking capabilities could prove exceptionally lucrative.
For example, say we visit a Legend site like Covers.com, where we often read articles about University of Oregon football and view the betting odds for every game, but we are based in New York City.
“Genius can then track our activity and collect our data and monetize it by selling it to an airline, which can turn around and directly target us for ads to fly to the next game (think FANHub [acquired by Genius Sports in 2021]).
“The company also owns Innovation Lab, whereby it also knows we often fly American Airlines and can sell our data directly to American or allow direct American advertising placements on Covers.com.”
If that bears out operationally, then investors should treat Locke’s statement in the company announcement last week as more than mere PR hyperbole: “This deal accelerates our strategic and financial objectives, supercharges fan monetization, and builds a fully integrated sports and gaming media network.”
He added: “For Genius Sports and our global partners, it delivers more data, more audience, more inventory, and greater monetization of sports fans. The acquisition of Legend will drive higher margins and stronger free cash flow, positioning Genius Sports to immediately transform the market and grow the size and scale of our business.”
Legend Customer Quality may have been Overlooked, too
The Citizens note also highlights “the quality of customers on the Legend platform,” where its niche media properties attract and convert a sticky audience of players for betting companies, leagues, and ecosystem vendors.
To gain a better understanding of the latent quality of the Legend business and its potential positive impact on Genius Sports’ bottom line, Citizens examined earnings multiples relative to two peers.
From this perspective, the deal compares favorably with EBITDA multiples that have surfaced through M&A activity in the gaming-affiliate space (Gambling.com purchase of OddsJam for 13.3x EBITDA) and in the marketing technology sector, where AppLovin (APP) trades at 17x Citizens’ 2027 EBITDA estimate for that stock.
In light of last week’s price crash and the pro forma imponderables, Citizens has reduced its price target from $17 to $11. That remains relatively conservative compared to the analyst consensus of $13.75.
Pro forma leverage (an estimate of net debt to equity) should be under 3x at deal close in Q2 2026, based on historical data and the $850 million loan entered into to fund the acquisition. However, Citizens Bender points out that the net figure would probably be below 1x by 2028.
Investors also should consider that net debt has been negative for at least five years, indicating the company has more cash and cash equivalents than its total debt.
The company says it will achieve EBITDA margins of 35% for the pro forma business by 2028. It could do much better than that with solid execution and continued total addressable market growth in the booming US sports betting and prediction markets.
A revenue growth rate of 21% CAGR from 2026 to 2028 could be conservative in Citizens’ view. We concur.
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