Why the PointsBet (ASX:PBH) share price could be in the buy zone

This sports betting company has doubled in value over the last 12 months. Here's why the gains may not be over…

| More on:
man looking at mobile phone and cheering representing surging asx share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The PointsBet Holdings Ltd (ASX: PBH) share price has been a positive performer on Tuesday.

In afternoon trade, the sports betting company's shares are up 5% to $13.24.

This latest gain means the PointsBet share price has now more than doubled in value since this time last year.

Can the PointsBet share price go higher?

According to a recent note out of Goldman Sachs, there still could be plenty of upside left in the PointsBet share price.

Its analysts currently have a buy rating and $17.20 price target on the company's shares.

Based on the latest PointsBet share price, this implies potential upside of 30% over the next 12 months.

Why is Goldman Sachs bullish?

Goldman Sachs believes that PointsBet is well-placed for growth in the coming years thanks to its strong position in a rapidly growing United States market.

It commented: "We forecast a US$39 bn sports betting TAM at maturity, implying a 40% CAGR out to 2033. As such, we believe PBH is well positioned to benefit from this multi-year high growth opportunity ahead as more US states begin to allow online sports betting, and see a path for it to achieve ~10% share overtime. Further, we believe the staged state by state opening derisks the US rollout story while we also believe there is upside risk from other adjacent revenue streams such as media/ads and iGaming which we believe is not reflected in market valuations."

The broker also sees scope for scalability benefits.

Its analysts explained: "We see scalability benefits ahead, particularly in the US, given i) full ramp-up of its exclusive NBC partnership, the US's largest sports broadcaster (>184 mn viewers), ii) driving marketing efficiencies, iii) scale benefits as it continues to roll out in more US states, and iv) iGaming and cross-selling opportunities ahead."

And finally, although its valuation may look stretched using traditional metrics, Goldman actually sees a lot of value in the PointsBet share price.

It commented: "While PBH is currently trading on ~6x forward EV/sales (below the recent avg), we believe this does not accurately reflect the significant long runway of growth ahead for the business. Over the next three years, we forecast a revenue CAGR of 97%, which compares favourably against a large basket of peers (25% ex Aus peers) and US SB/iGaming peers of 35%, trading on >11x EV/Sales. Notwithstanding different business models/scale, we believe PBH's multiple gap to US operator DraftKings (DKNG) should converge closer over time."

Should you invest $1,000 in Harvey Norman Holdings Limited right now?

Before you buy Harvey Norman Holdings Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Harvey Norman Holdings Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

James Mickleboro does not own any shares mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

A neon sign says 'Top Ten'.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a rough trading day for ASX stocks this Monday.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Share Gainers

Why 4DMedical, Gold Road, Syrah, and Tyro shares are racing higher today

These shares are starting the week strongly. But why?

Read more »

Rising gold share price represented by a green arrow on piles of gold block.
Gold

2 ASX gold stocks racing higher in Monday's sinking market

Investors are sending these ASX gold stocks flying higher on Monday. But why?

Read more »

Man with rocket wings which have flames coming out of them.
Share Gainers

Guess which ASX All Ords share just rocketed 19% on BIG news

Investors are sending this ASX All Ords share flying on Monday. But why?

Read more »

Person pretends to types on laptop drawn in sand.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a happy finish to the week for ASX shares this Friday.

Read more »

Five young people sit in a row having fun and interacting with their mobile phones.
Share Gainers

5 ASX All Ords stocks rocketing higher this week

Investors sent these five ASX All Ords stocks soaring this week. But why?

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Share Gainers

Why Boss Energy, Capstone, Dimerix, and Platinum shares are storming higher today

These shares are having a good finish to the week. Let's find out why.

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

It was the ASX's fourth day of gains for the week today.

Read more »