Ahead of its fourth-quarter earnings report scheduled for Friday morning, DraftKings (NASDAQ:DKNG) stock is following…
Posted on: September 14, 2021, 10:27h.
Final up to date on: September 14, 2021, 02:36h.
Todd Shriber Learn Extra
DraftKings (NASDAQ:DKNG) inventory is following different gaming equities decrease right now. However the sportsbook operator is on the receiving finish of extra help from the sell-side.
DraftKings inventory highlighted on the Nasdaq market web site, seen above. An analyst lifted his worth goal on the title right now. (Picture: By way of Information Company)
In a observe to purchasers right now, Craig-Hallum analyst Ryan Sigdahl reiterates a “purchase” ranking on DraftKings, whereas boosting his worth goal on the inventory to $70 from $60. That suggests upside of just about 17 % from present ranges.
DraftKings’ all-time excessive is $74.38, which was set in late March. The Wall Avenue consensus worth forecast on the title is $70.85.
DraftKings is the one pure-play sports activities betting title at the moment obtainable within the US fairness market — a trait lengthy highlighted by bullish analysts. The inventory is up practically 30 % year-to-date and 10.71 % over the previous month, with that current ascent powered largely by the arrival of soccer season.
Soccer Incredible Catalyst for DraftKings Inventory
Soccer is probably the most wagered-on sport within the US, and as such, the beginning of the 2021 season is fueling upside for sports activities betting equities.
Sigdahl, the Craig-Hallum analyst, says soccer wagering volumes are already topping “lofty” forecasts. Particular to DraftKings, the analyst sees that operator as best-positioned to learn from soccer betting enthusiasm. He famous the corporate might steal market share from rival FanDuel this season.
FanDuel, a unit of Flutter Leisure, is the biggest on-line sportsbook operator within the US, whereas DraftKings is locked in an more and more intense battle for the second spot with betMGM.
Information confirms that soccer is certainly materials for betting operators. The game drives an estimated 35 % to 40 % of annual revenues for sportsbooks, with a 3rd of these yearly gross sales arriving within the fourth quarter.
One level analysts and buyers will certainly be monitoring when third- and fourth-quarter earnings reviews begin rolling in is how a lot betting firms are spending on buyer acquisition. It’s a related level, as a result of a few of the marquee names within the on-line wagering area aren’t but worthwhile. That’s vital for DraftKings buyers, as a result of the corporate might not flip worthwhile on the idea of earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) till 2023 on the earliest.
Loads of Enthusiasm for DraftKings Inventory
Since turning into a standalone public firm in April 2020, DraftKings turned a Wall Avenue favourite, a reality that is still true right now. Twenty-six analysts cowl the corporate, 18 of which have bullish or very bullish rankings on the shares.
The operator is a constant raiser of income steering, and a few analysts are already speculating that with a powerful soccer deal with, DraftKings might increase third-quarter and full-year gross sales estimates.
A lot of buyers’ enthusiasm for DraftKings revolves round growing state-level legalization of web casinos and sports activities betting. Additionally they observe the next income enhance that comes with a extra hospitable income setting. Moreover, the corporate has a powerful steadiness sheet and is displaying a willingness to make acquisitions to develop its high line profile.
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