DKNG) is its high valuation, while the valuation of Penn National Gaming (NASDAQ: PENN) is trailing sports betting rivals, according to BofA Securities.
Kelley initiated coverage of DraftKings with a Neutral rating and $40 price target.
After the launch, the analyst said he will be focusing on the app interface, customer reception, download metrics and market share data for the Barstool app.
GAN), he said.
Penn shares trade at 5.6x enterprise value/revenue, lower than DraftKings’ multiple of 15.7 and Gan’s 10.9x.
Penn’s 2020 stock gain of 112% trails DraftKings’ 246% and Gan’s 122%, Kelley said.
DraftKings has a built-in market from its daily fantasy business, which has 9 million users across 43 states, the analyst said.
The online sports and iGaming businesses have a strong presence in nine states, he said.
recently downgraded both DraftKings and Penn National and said expectations for the sports betting and iGaming markets could be high.” data-reactid=”35″>Morgan Stanley recently downgraded both DraftKings and Penn National and said expectations for the sports betting and iGaming markets could be high.
The combined market size is likely to reach only $12 billion by 2025, compared to average estimates of $20 billion, according to Morgan Stanley.
Barstool CEO and founder Dave Portnoy recently said the Barstool brand is similar to a sports team with its loyal fans and followers. The Penn National brand has over 100 million followers on social media.
Latest Ratings for PENN
| Date | Firm | Action | From | To |
|---|---|---|---|---|
| Sep 2020 | Bank of America | Reiterates | Buy | |
| Aug 2020 | Morgan Stanley | Downgrades | Overweight | Equal-Weight |
| Aug 2020 | Truist Securities | Maintains | Buy |
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