The PointsBet Holdings Ltd (ASX: PBH) share price is trading lower on Monday amid broad weakness in the tech sector.
At the time of writing, the sports betting and iGaming company’s shares are down 0.5% to $10.05.
This means the PointsBet share price is now down 13% since the start of the year.
Can the PointsBet share price bounce back?
Fortunately for shareholders, one leading broker believes the PointsBet share price can bounce back strongly from its 2021 weakness.
In fact, the broker sees potential for the company’s shares to be trading close to $15.00 in the near future.
According to a note out of Goldman Sachs this morning, its analysts have retained their buy rating and $14.75 price target on its shares.
Based on the current PointsBet share price, this implies potential upside of ~47% for investors.
What did the broker say?
The note reveals that Goldman Sachs attended the G2E conference in Las Vegas. It also hosted meetings with the management teams of PointsBet and a number of other gaming companies.
The broker spoke positively about its meeting with Pointsbet’s US CEO Johnny Aitken and his team.
Goldman said: “Management believes their tech stack, purpose-built in the mid 2010s for the US, will be a key source of differentiation as it can roll out better products, more rapidly than competitors. Furthermore, the company highlighted their trading team, which has a presence in Europe, Australia and North America, will allow them to make markets rather than taking lines, providing a competitive advantage (ie. better same-game parlays).”
The broker also notes that management is confident that it can carve out a decent market share in the United States even in an intensely promotional environment.
The broker explained: “Management took a different view on consolidation, pointing to Australia where consumers went from 1-2 apps in the early 2010s to 4-6 now. They believe that in an environment with multiple apps on device, the ability to compete on tech, leverage their NBC partnership through all parts of the funnel, and drive retention through engagement will enable them to carve out mid single-digit market share even in an intensely promotional environment.”
This could bode well for the future performance of the PointsBet share price.
After taking into account all its meetings, Goldman concluded: “While the promotional environment is a risk, we came away more confident in the demand backdrop and adoption trends online and found comments about one-time marketing spend to be a sign of a more rational competitive environment on the horizon.”
All in all, the broker appears to believe there’s potential for the PointsBet share price to be trading within sight of $15.00 by the end of the year.
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Motley Fool contributor James Mickleboro has no position in any of the stocks 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.
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