Pointsbet Holdings Ltd (ASX: PBH) share price
Pointsbet is an online bookmaker with operations in Australia and the United States. The company offers innovative products that facilitate betting on horse racing and other sports.
The Pointsbet share price has risen significantly from the lows we saw in March. Contributing to this rise was a trading update released by the company on 27 May. The announcement reminded investors that both AFL and Rugby League would soon be recommencing. Also included was advice that Pointsbet had entered into an agreement with Fox Sports to become the media provider's AFL betting partner. According to Pointsbet, this was part of 'an opportunistic approach to targeting media assets to deliver efficient client acquisition and increased betting volumes'. Pointsbet also has an existing deal covering Tier 1 horse racing with Channel Seven.
What's next for Pointsbet?
Pointsbet is not short on ambition. Also included in the May update was the company's assertion that it 'aims to provide more markets on the major Australian and US sports than any other bookmaker'. Given the company's recent success, it is easy to believe that Pointsbet will deliver on its aspirations.
Another feather in the company's cap is that it is operating in the lucrative US market and already seeing considerable success. Over 30% of the US population now has access to legal sports betting. Despite the fact that sports were recently suspended due to COVID-19 restrictions, Pointsbet reached 22,716 US clients in Q3 of the 2020 financial year. It's total active clients across Australia and the US now totals 106,046. This represents a growth of 64% on the prior corresponding period.
While Pointsbet is a relative newcomer to the betting industry, I believe it shows significant growth potential due to its position in the US and its unique betting markets. This potential is highlighted by the fact that the company's market cap currently sits at $906 million. Compare this to the market cap of fellow gambling provider Tabcorp Holdings Limited (ASX: TAH) which sits at $7.36 billion. Pointsbet shows room for enormous growth as it increases its market share.
The Pointsbet share price is up 221% since this time last year, hitting a record high of $7.17 yesterday.
Sezzle Inc (ASX: SZL) share price
Sezzle is a financial technology company based in the US. This company works with a platform similar to ASX market darling Afterpay Ltd (ASX: APT). That is, it offers buy now, pay later (BNPL) solutions to consumers.
Like other companies in the BNPL sector, the Sezzle share price has been performing well. This can be partially attributed to the fact that more consumers have moved to online shopping during lockdown restrictions. Sezzle is a significant player in the industry with 1.3 million active customers. Its platform is available through 14,900 merchants and its app has been downloaded around 600,000 times.
While Sezzle's popularity does not presently match that of Afterpay's, I believe it shows great potential, especially as a possible takeover target. If the BNPL industry consolidates, it's very possible that Sezzle will get bought up by one of the major players. Alternatively, the company may continue to grow independently with the aim of rivaling Afterpay. Given the fact Sezzle is headquartered in the US and already actively targeting the US$460 billion Canadian retail market, I feel this is definitely possible.
The Sezzle share price is up over 770% from its 52-week low of $0.35 and is currently sitting at $3.05 per share. The company also reached a new, all time high of $3.25 in yesterday's trade.
Foolish takeaway
Despite their recent gains, I still feel that both both the Sezzle and Pointsbet share prices offer considerable upside potential. Pointsbet is looking to leverage its huge growth potential in the lucrative US sports betting market while it expands its market share in Australia. Sezzle looks set to continue growing as it increases the number of merchants offering its platform along with its number of users. Is it time to invest? This writer believes yes.
