The PointsBet Holdings Ltd (ASX: PBH) share price has been on a wild ride in 2021.
Although the sports betting company's shares are up a decent 7% so far this year, they are trading well below their 2021 highs.
In fact, at $12.68, the PointsBet share price is currently trading 30% lower than its February-high of $18.13.
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Is this a buying opportunity for investors?
One leading broker that believes the recent weakness in the PointsBet share price is a buying opportunity is Goldman Sachs.
According to a note out of the investment bank this morning, its analysts have retained their $17.50 price target.
This price target implies potential upside of 38% for its shares over the next 12 months.
Why does Goldman believe the PointsBet share price can surge higher?
There a number of reasons that Goldman is positive on PointsBet. One of those is its potential to win a decent slice of a very lucrative US market.
Commenting on its ability to compete in the US market, Goldman said: "We believe PBH can and certainly see scope for it to drive a niche share of the burgeoning US market over the medium to long term and see no reason why it cannot achieve ~10% share of states it operates, particularly given it has already broadly delivered on that (>10% share of handle in NJ)."
Though, it has warned investors not to expect its share of the market to happen overnight.
The broker explained: "To this end we have also been reminding investors that PBH's share in new states will likely be softer than peers such as the DFS [daily fantasy sports] operators given i) lack of initial advantage given it does not have a DFS database to convert, ii) need to build brand awareness, and iii) thus far no iGaming offering. As we have seen in states it has market access and operational in, over time, PBH's share rises which we attribute to its strong product offering and the dissipating impacts from peers DFS database."
Overall, Goldman Sachs believes PointsBet is well-placed for growth and is forecasting a >90% revenue compound annual growth rate over the next three years.
