DraftKings rallies after MoffettNathanson upgrade on business momentum

As previously reported MoffettNathanson earlier this morning upgraded DraftKings to Outperform from Market Perform with a price target of $37, up from $31. The stock in morning trading is up 5% to $29.57. The analyst expects the momentum in both sides of the company’s business to continue. This should drive “sustained, robust” sales growth while DraftKings remains focused on strategically reining in expense growth, the analyst tells investors in a research note. When taken together, this puts DraftKings on the “cusp of a meaningful inflection in profitability,” says MoffettNathanson. The firm expects DraftKings will reach GAAP EBITDA profitability in 2025 after achieving a full year of adjusted EBITDA profitability in 2024.