The demand for online sports betting (OSB), and iGaming remains elevated, despite the easing of stay-at-home mandates and the reopening of casinos. This benefits companies operating in this space, including DraftKings (DKNG).
DraftKings’ most recent quarterly numbers (Q2 2021), reflected stellar growth across all key metrics. Meanwhile, the company stated that the momentum in its business has sustained in Q3. Therefore, I maintain a bullish outlook on DraftKings stock. (See DraftKings stock charts on TipRanks)
The company’s Monthly Unique Payers (MUP) and Average Revenue Per Monthly Unique Payer (ARPMUP) increased by 281% and 26%, respectively, on a year-over-year basis. Furthermore, customer acquisition and retention remained strong across Daily Fantasy Sports (DFS), OSB, and iGaming.
Besides strong customer engagement, increased legalization of OSB and iGaming across several U.S. states is encouraging, and presents good growth opportunities.
Commenting on the Q2 performance, DraftKings CEO Jason Robins said that “we’re not seeing any signs of the economies reopening impacting demand for our mobile product offerings.”
Anticipating strong growth ahead, DraftKings once again raised its full-year revenue outlook. Thanks to the strong momentum in the business, favorable legislative policies, and advancement into newer areas of growth — including media and nonfungible tokens (NFT) — DraftKings stock has gained approximately 41.7% year-to-date.
Citing strong monthly GGR (gross gaming revenue) trends, Daniel Adam of Loop Capital Markets stated that the company’s Q3 revenues are tracking “ahead of consensus.” Notably, Wall Street expects DraftKings to deliver revenues of $233.1 million in Q3.
Adam has a Buy rating on DraftKings stock, with a price target of $105 (65.2% upside potential).
On TipRanks, DKNG stock has a Moderate Buy consensus rating, based on nine Buys and four Holds. The average DraftKings price target of $70.17 implies 10.4% upside potential to current levels.
Meanwhile, TipRanks’ Hedge Fund Trading Activity tool shows hedge fund managers increased their cumulative holdings in DKNG by 13.8 million shares in the last quarter.
Disclosure: On the date of publication, Amit Singh had no position in any of the companies discussed in this article.
Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.
