Shares of the online sports entertainment and gaming company DraftKings (NASDAQ:DKNG) are up about 131% in one year, outperforming the S&P 500’s (SPX) nearly 22% gain. While DKNG stock has appreciated significantly, Goldman Sachs analyst Benjamin Miller sees more room for growth. DKNG stock closed 2.79% higher on Tuesday, April 16.
Miller initiated coverage on DraftKings stock with a Buy rating on April 16. His price target of $60 implies a 33.51% upside potential from current levels. The analyst expects DraftKings’ revenue to grow at a double-digit rate, driven by sustained momentum in existing states and forthcoming legalization in new states for online sports betting and gaming. Miller finds DKNG’s growth-adjusted revenue multiple appealing at current levels, despite the recent upward trend in the stock.
Factors Supporting DKNG Stock
DraftKings’ investments to drive product and customer experience enabled it to gain market share. Moreover, its better customer acquisition, improved retention and engagement, and cost-reduction measures should continue to support its top- and bottom-line growth.
Thanks to these measures, the company expects its top line to increase by 27% to 34% in Fiscal 2024. Further, DraftKings will likely benefit from the launch of mobile sports betting in North Carolina and the acquisition of leading lottery app Jackpocket.
Is DraftKings a Buy, Sell, or Hold?
DraftKings stock has gained significantly. Despite the considerable increase in its value, Wall Street is bullish about its prospects. It has 25 Buys, two Holds, and one Sell recommendation for a Strong Buy consensus rating.
The analysts’ average DKNG stock price target is $50.92, implying 13.31% upside potential from current levels.
