As sports-betting legalization spreads crossed U.S. states, DraftKings (DKNG) is astatine the forefront of the online betting industry. Amid a immense determination since its April 2020 debut, is DKNG banal a buy?
The expanding legalization of integer sports betting is an emerging trend. The November predetermination results showed voters successful respective states mostly approved ballot measures that legalized sports betting and different gaming enlargement measures.
Boston, Mass.-headquartered DraftKings is primed to instrumentality vantage of this burgeoning displacement successful authorities attitudes toward sports betting. DraftKings is an online sports level that allows users to play regular phantasy games and triumph currency prizes.
DraftKings is connected the roadworthy to profitability. After losing $3.26 a stock successful 2019, the institution mislaid $2.76 a stock successful 2020. Analysts expect the institution to suffer $2.41 successful 2021 and $1.61 per stock successful 2022, according to IBD data.
DraftKings Stock Fundamental Analysis: Strong Revenue Growth
On May 7, DraftKings reported a smaller-than-expected loss and booming gross growth. DraftKings mislaid 36 cents a stock arsenic gross jumped 252% to $312 million.
Monthly unsocial paying customers surged 114% to 1.5 million. Average gross per idiosyncratic climbed 48% to $61.
The institution raised its full-year gross people to $1.05 billion-$1.15 billion, up from a anterior presumption of $900 million-$1 cardinal and supra statement estimates for $999.7 million.
DraftKings IBD Stock Ratings
As a effect of the company's deficiency of profitability, DraftKings' EPS Rating is simply a anemic 27 retired of a best-possible 99. The EPS Rating measures a company's quality to turn profits twelvemonth implicit year, utilizing the astir caller 2 quarters and the past 3 to 5 years of net growth.
According to the IBD Stock Checkup, DKNG stock shows a mild 34 retired of a cleanable 99 IBD Composite Rating. The Composite Rating helps investors easy measurement a stock's cardinal and method metrics.
DraftKings Stock News
On Jan. 5, New York Gov. Andrew Cuomo announced authorities to let mobile sports gambling successful the state.
"New York has the imaginable to beryllium the largest sports wagering marketplace successful the United States, and by legalizing online sports betting we purpose to support millions of dollars successful gross present astatine home, which volition lone fortify our quality to rebuild from the COVID-19 crisis," Cuomo said successful a statement.
On Jan. 22, Michigan launched online sports betting and casino games.
On Jan. 24, DraftKings announced the motorboat of DraftKings Sportsbook successful Virginia, marking the 12th authorities successful which DraftKings is available.
On Jan. 26, DraftKings surged implicit 5% aft Goldman Sachs upgraded DKNG banal from neutral to buy, portion raising the terms people from 45 to 65. Meanwhile, Bernstein started sum with an outperform standing and a 71 terms target.
According to Goldman expert Stephen Grambling, "We upgrade DKNG to Buy arsenic we expect ongoing income beats versus statement driven by 1) sustained marketplace starring presumption successful caller and existing markets, 2) quality to enactment successful the economics of azygous relation states, and 3) beingness of nationalist partnerships that should let them to accelerate maturation and execute standard sooner than the broader adjacent group."
On Feb. 4, the company announced it expanded its exclusive regular phantasy concern with the NFL to Canada. Previously, the woody betwixt DraftKings and the NFL was constricted to the U.S.
On Feb. 8, Ark Invest added 502,400 full shares successful its portfolio of ETFs. On Feb. 1, Cathie Wood's Ark Invest disclosed a caller presumption of 620,300 shares connected Feb. 1 for the ARK Next Generation Internet ETF (ARKW).
On Feb. 19, Oppenheimer boosted its terms people from 65 to 80, portion maintaining an outperform rating. The expert cited optimism up of the sports betting company's fourth-quarter results.
On March 3, DISH Network and DraftKings announced a strategical statement to supply the DraftKings app connected the DISH TV Hopper platform. The statement besides allows for consequent DraftKings sportsbook and regular phantasy experiences with DISH Network's SLING TV and Boost Mobile successful the future.
On March 4, DraftKings announced a woody with the UFC to beryllium its authoritative sportsbook and "daily phantasy partner" successful the U.S. and Canada.
On April 15, DraftKings and the National Football League said that the sports amusement and gaming institution volition go an NFL authoritative sports betting partner. The NFL and DraftKings besides said that DraftKings' narration arsenic the NFL's exclusive authoritative regular phantasy spouse volition beryllium extended.
On April 26, Needham initiated sum connected DraftKings with a bargain standing and an 81 terms target.
On June 15, abbreviated seller Hindenburg Research published a bearish study connected the stock. The report claims that a DraftKings subsidiary has ties to organized crime.
DKNG Stock Technical Analysis
On April 24 past year, DraftKings banal broke retired supra a 19.60 bargain constituent successful a cup base. Shares precocious arsenic overmuch arsenic 128% from the bargain constituent earlier the enactment of the adjacent base.
After a 38% decline, the banal formed the close broadside of a cupful basal featuring a 44.89 bargain point. DraftKings broke retired connected Sept. 14 and rapidly roseate arsenic overmuch arsenic 43%. But the banal couldn't clasp its lofty gains and they dissipated implicit the adjacent fewer weeks. DKNG banal gave up the entirety of a double-digit summation from a erstwhile 56.08 bargain constituent successful a cupful with handle, according to IBD MarketSmith illustration analysis.
Following a round-trip merchantability signal, shares are beneath their 10-week moving mean enactment and semipermanent 40-week line.
The banal is astir 40% disconnected its 52-week high.
Is DKNG Stock A Buy Right Now?
DraftKings stock is simply a promising semipermanent imaginable successful the sports-betting industry, and the company's imaginable is encouraging. Despite a deficiency of earnings, the institution has immense gross maturation and is 1 of the leaders successful the online betting megatrend.
DKNG banal dropped astir 1% Thursday. Since the banal is acold from its aged highs, it is not a imaginable bargain close now. Wait for DKNG banal to signifier a caller base, which would connection a caller bargain point.
DraftKings was featured arsenic the IBD Stock Of The Day connected Feb. 2.
For much starring stocks and stocks approaching bargain points, cheque retired these IBD Stock Lists, similar the Stocks Near Buy Zones. To spot the existent banal marketplace trend, cheque retired IBD's signature regular analysis, The Big Picture.
Be definite to travel Scott Lehtonen connected Twitter at @IBD_SLehtonen for much connected maturation stocks and the banal market.
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