Analyst Bernie McTernan of Needham maintained a Buy rating on DraftKings, retaining the price target of $52.00.
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Bernie McTernan has given his Buy rating due to a combination of factors surrounding DraftKings’ recent strategic moves. The company’s acquisition of Railbird is a significant step towards launching a prediction market product, which is expected to enhance investor sentiment and expand DraftKings’ total addressable market (TAM) into states where they currently do not have access, such as California, Texas, and Florida.
Furthermore, McTernan notes that while the initial launch may not include sports, the potential for future expansion into sports contracts could significantly increase the opportunity. The investment in customer acquisition, estimated between $100M-$300M, is another critical factor, especially if the product includes sports. Overall, McTernan sees the prediction market as a way to effectively legalize online sports betting nationwide, potentially driving substantial market activity and encouraging more states to legalize online sports betting to benefit from tax revenues.
In another report released today, Truist Financial also assigned a Buy rating to the stock with a $33.60 price target.
Based on the recent corporate insider activity of 137 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DKNG in relation to earlier this year.