Leading broker tips PointsBet (ASX:PBH) share price to rise 39%

Is it time to take a punt on PointsBet shares?

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A group of happy young people watching sport on a laptop celebrate, indicating a win for sports betting bluebet

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The PointsBet Holdings Ltd (ASX: PBH) share price has been out of form so far in 2021.

Since the start of the year, the sports betting company’s shares have fallen 7.5%.

Is the weakness in the PointsBet share price a buying opportunity for investors?

According to a note out of Goldman Sachs this week, its analysts believe the PointsBet share price is in the buy zone.

That note reveals that the broker has reiterated its buy rating but trimmed its price target slightly to $14.75.

Based on the latest PointsBet share price of $10.59, this price target implies potential upside of 39% over the next 12 months.

Why is Goldman bullish?

Goldman remains bullish on PointsBet due largely to its massive opportunity in the United States market.

It estimates that the company will have a US$37 billion total addressable market in the US by FY 2033. This represents a 37% compound annual growth rate between 2019 and 2033.

Its analysts commented: “We reiterate our Buy rating on PBH, with our thesis underpinned by i) PBH’s leverage to the burgeoning US Sports Betting and iGaming market, ii) our view that PBH is well-placed to achieve 10% share in states it operates in, iii) upside risk to LR sustainable margins in Aus and the US, iv) Scalability benefits ahead noting positive impacts from the NBCUniversal deal to come and iGaming synergies, and v) strong management team and execution track record.”

In addition, the broker believes the current PointsBet share price does not “reflect much upside from potential license wins in states such as NY.”

Though, given how the company recently missed out on a licence in Arizona, along with BlueBet Holdings Ltd (ASX: BBT), it is understandable why some investors aren’t getting carried away with this one.

Nevertheless, should the company be successful in gaining a New York licence, the broker appears to believe this will result in the PointsBet share price responding very positively.

Should you invest $1,000 in PointsBet right now?

Before you consider PointsBet, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and PointsBet 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 are better buys.

*Returns as of January 13th 2022

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 BlueBet Holdings Ltd and 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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