The PointsBet Holdings Ltd (ASX: PBH) share price has taken a hit in 2022.
Since the start of the year, the sports betting company's shares have lost 53% of their value.
This has been driven by the market's aversion to loss-making tech stocks as interest rates rise.
Is the PointsBet share price weakness a buying opportunity?
The team at Bell Potter believes that investors should take advantage of the weakness in the PointsBet share price to pick up shares.
According to a recent note, the broker has retained its speculative buy rating with a $5.25 price target.
Based on the current PointsBet share price of $3.22, this implies potential upside of 63% for investors over the next 12 months.
What did the broker say?
Bell Potter was pleased with PointsBet's fourth quarter update and highlights that the company is making "positive steps." It was also pleased that management has confidence that its cash balance will be sufficient to see it through the near term.
Bell Potter commented:
PointsBet released its Appendix 4C for the June quarter and most of the key metrics were slightly better than our forecasts: net win in Australia up 28% to A$55.2m in Q4 and up 30% to $215.4m in FY22 (vs BPe A$212.9m); net win in the US (including iGaming) up 70% to A$30.4m in Q4 and up >100% to A$93.9m in FY22 (vs BPe $84.4m); operating cash outflow of A$60.8m in Q4 and A$197.5m in FY22 (vs BPe A$201.8m); and corporate cash of A$472.7m at 30 June (vs BPe c.A$450m).
The company also provided the first result for the recently launched Canadian operation and the net win (including iGaming) was A$0.2m in Q4. The blended online handle market share was 3.5% in Q4 which was consistent with the 3.6% in Q3. PointsBet confirmed it had generated a positive EBITDA result in the Australian operation in FY22 and said that post the placement of stock to SIG Sports it had sufficient funding for the "near term".
