Winners will no doubt emerge if New York legalizes online gambling. Many are betting on DraftKings. After all, the stock was Bottom of Formup over 5% today due to this news. Investors took their profits quickly and the stock ended at a 3.8% loss with a share price of $48.94.
There is a reason for ecstasy. The stock for this noted digital sports entertainment and gaming company is up a whopping 357% year-to-date.
What do we know ab out DraftKings?
We know DraftKings as a provider of fantasy sports, sports betting, and iGaming opportunities. It is also known for the design and development of sports betting and casino gaming platform software for online and retail sportsbook and casino gaming products.
It clearly has a to place in the pantheon of gaming greats. So what are Wall Street analysts saying? For one, Needham analyst Brad Erickson has a $70 price target, while J.P. Morgan initiated a “neutral” rating a $48 predicted price.
At issue is whether the company has room for more expansion due to increasing competition, iffy pending legalization and the current high price. Nonetheless, there could be room for some upside given the growth in the $58 billion U.S. industry.
Not everyone is onboard. While sixteen analysts rated the stock as a “strong buy,” nine others call it as a “hold.” The average price per the analysts is $60.27, with a low of $39 and a high of $100.
Reports are positive
Further legalization of sports betting in more U.S. states (including Louisiana, Maryland, and South Dakota) could send DKNG up a notch or two. If these three tilt, that makes twenty-four states in total in favor.
Of note, DKNG reported strong third-quarter results. Its merger with Diamond Eagle impacted its revenue, pushing it up 98% year over year.
The return of major sports – the NBA, MLB, NHL – and the start of the NFL season boded well for strong customer engagement. Even before these sports had resumed, DraftKings was thriving due to betting on esports.
It doesn’t hurt that the company has surpassed one million monthly users. The prognosis is bright with revenue of $750 million to $850 million projected for 2021. Of course, DKNG’s revenue should see even higher gains after the pandemic.
After all, fantasy sports has grown immensely, and DKNG is a pioneer in this realm
It will surely benefit from the decriminalization of single sports betting in Canada. Canada’s Department of Justice now allow provinces to issue licenses to companies in this sector, with the exception of horse racing. As a result, billions of dollars in revenue should flow to DKNG from Canada.