As sports-betting legalization spreads throughout U.S. states, DraftKings (DKNG) is on the forefront of the sports-betting trade. Amid large worth strikes since its April 2020 debut, is DKNG stock a purchase proper now?
DraftKings stock rallied greater than 2% Monday after TD Cowen maintained its outperform score and raised its worth goal from 25 to 27. Shares moved additional above a 21.72 purchase level in a cup base. DKNG stock traded round 22.40, contained in the 5% purchase zone that runs as much as 23.00.
First-quarter earnings outcomes are due out Thursday earlier than the stock market open. Wall Street expects the corporate to lose 86 cents per share on gross sales of $696.9 million, per FactSet.
DraftKings Fundamental Story
The increasing legalization of digital sports activities betting is an rising development. The November 2020 election outcomes confirmed voters in a number of states largely accepted poll measures that legalized sports activities betting and different gaming growth measures.
Boston, Mass.-headquartered DraftKings is primed to benefit from this burgeoning shift in state attitudes towards sports activities betting. DraftKings is a web-based sports activities platform that permits customers to play day by day fantasy video games and win money prizes.
Sports-betting prospects look robust, with round 20% of U.S. adults saying they guess money on sports activities indirectly within the final 12 months, in keeping with a 2022 Pew Research Center survey. The American Gaming Association stories that business betting trade noticed file income in 2022.
DraftKings is on the highway to profitability. After shedding $3.16 per share in 2022, the corporate is anticipated to lose $2.06 in 2023 and 99 cents in 2024, in keeping with IBD knowledge.
DraftKings Stock: Strong Revenue Growth
On Feb. 16, DKNG topped fourth-quarter estimates, reporting a smaller-than-expected loss. The firm misplaced 53 cents per share vs. an 80-cent loss a yr earlier. Meanwhile, DraftKings This fall income grew 81% to $855 million.
On the yr, DraftKings reported a lack of $3.16 per share as income grew 73% to $2.24 billion. Analysts see DraftKings income progress persevering with, averaging an annual enhance of twenty-two% by means of 2026.
DraftKings IBD Stock Ratings
As a results of the corporate’s lack of profitability, DraftKings’ Earnings-Per-Share Rating is a weak 46 out of a best-possible 99. The EPS Rating measures an organization’s capability to develop earnings yr over yr, utilizing the newest two quarters and the previous three-to-five years of earnings progress.
According to the IBD Stock Checkup, DKNG stock reveals an bettering 93 out of an ideal 99 IBD Composite Rating. The Composite Rating helps traders simply measure a stock’s basic and technical metrics.
DKNG Stock Technical Analysis
DKNG stock is already up greater than 83% yr up to now in 2023. Shares are breaking out previous a cup base’s 21.72 purchase level.
DraftKings stock is above the most recent entry, in keeping with IBD MarketSmith chart analysis, after current good points.
Is DKNG Stock A Buy Right Now?
DraftKings stock is a promising long-term prospect within the sports-betting trade, and the corporate’s potential is encouraging. Despite a scarcity of earnings, the corporate has robust income progress and is without doubt one of the leaders within the online-betting megatrend. Since the stock is in purchase vary above the purchase level, it’s a purchase proper now. Keep in thoughts that the approaching earnings report does enhance the danger of this newest breakout transfer.
For extra main shares and shares approaching purchase factors, try these IBD Stock Lists, just like the Stocks Near Buy Zones. To see the present stock market development, try IBD’s signature day by day analysis, The Big Picture.
Be positive to comply with Scott Lehtonen on Twitter at @IBD_SLehtonen for extra on progress shares and the stock market.
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