DraftKings Well Positioned to Capitalize on the Rise of Online Sports Betting, Says Analyst
DKNG) short life as a public company has so far proved to be a roaring success. The stock is up by a mighty 265% year-to-date, despite various headwinds.” data-reactid=”12″>Online sports betting player DraftKings’ (DKNG) short life as a public company has so far proved to be a roaring success. The stock is up by a mighty 265% year-to-date, despite various headwinds.
Covid-19 has played its part, with sports bought to a standstill by the pandemic, and upcoming schedules subject to further disruption should cases rise again. Additionally, the nascent sector has yet to clear various regulatory hurdles and receive the go ahead signal in multiple states across the country.
Jed Kelly notes the top brass’ confident take on the future of OSB and its place within it, noting the company’s “bullish tone towards their long-term positioning in the rapidly growing US legal online sports betting (OSB) and iGaming markets.”” data-reactid=”14″>But Following a virtual meeting with DraftKings’ management, Oppenheimer analyst Jed Kelly notes the top brass’ confident take on the future of OSB and its place within it, noting the company’s “bullish tone towards their long-term positioning in the rapidly growing US legal online sports betting (OSB) and iGaming markets.”
Furthermore, Kelly believes with the return of pro sports, DKNG’s marketing nous will see the company reap rewards from the “pent-up demand for OSB due to the limited spring/early-summer sports calendar.”
The analyst also lists for investors several key takeaways from the talks and said, “1) DKNG is effectively leveraging its DFS database and marketing analytics platform to generate attractive LTV/CAC economics as more states legalize sports betting and iGaming; 2) DKNG’s back-end regulatory platform is a key competitive advantage that allows it to gain state approval relatively quickly and build a scalable brand platform that is difficult for regional players to replicate; 3) The SBTech product integration is trending nicely and will allow the company to enhance their in-game product offering and potentially increase product stickiness.”
Moreover, DKNG management also expects Tennessee and Michigan to go live shortly and also stated that the IRS’ plan to impose an excise tax on daily fantasy sports betting, is “an opinion and is not legally binding.”
click here)” data-reactid=”22″>All in all, the company’s bullish tone is one which Kelly wholeheartedly endorses. The analyst has an Outperform (i.e. Buy) rating on DKNG stock alongside a $46 price target. This conveys Kelly’s belief shares will appreciate by 18% over the next 12 months. (To watch Kelly’s track record, click here)
See DraftKings stock analysis on TipRanks)” data-reactid=”23″>There’s not much dissent to Kelly’s thesis amongst his colleagues. DKNG’s Strong Buy consensus rating is backed by 11 Buys and 1 lone Hold. The average price target is similar to Kelly’s, and at $47.10, represents possible upside of 20.5%. (See DraftKings stock analysis on TipRanks)
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