The PointsBet Holdings Ltd (ASX: PBH) share price is pushing higher again on Wednesday.
In afternoon trade, the sports betting company's shares are up 0.5% to $8.85.
Image source: Getty Images
Can the PointsBet share price push higher?
The good news for investors is that one leading broker believes the PointsBet share price could still run a lot higher from here.
According to a note out of Goldman Sachs, its analysts have retained their buy rating and $12.79 price target on the company's shares.
Based on the current PointsBet share price, this implies potential upside of 44% over the next 12 months.
What did Goldman say?
Goldman was pleased to see that PointsBet has been recommended for one of nine mobile sports betting licenses in New York.
It commented: "We see this as a positive development for PBH and believe this should be well-received by the market given i) our views of the growing asymmetric risks inherent in the PBH share price in particular around the NY RFP process, and ii) recent share price weakness."
Goldman notes that New York was one of the largest states in its total addressable market (TAM) model for PointsBet.
"We note that NY represents one of the largest states in our US OSB TAM model, at US$1.4 bn at maturity, accounting for 3.8% of total, though we modeled a lower TAM due to the challenging structure."
"If NY were modeled like a typical "Tier 1" state (~22bps of consumption expenditures), the market size could be as higher than what we currently embed (as high as $3.8bn), but the market could see lower penetration of consumer expenditures if adoption lags due to better lines/promos in neighboring states, less conversion from the grey market," it added.
Nevertheless, Goldman believes investors should not underestimate the value in gaining a New York licence.
"That said, we believe the strategic merits in obtaining licensing in a large state like NY should not be underestimated particularly given PBH's presence in neighboring states of New Jersey and Pennsylvania," it concluded.
All in all, Goldman believes the company is well-placed for strong long term growth. In light of this, it sees a lot of value in the current PointsBet share price.
