Why The DraftKings Stock Increased 2.47% (DKNG)

By Amit Chowdhry ● Jan 24, 2023
  • The stock price of DraftKings (DKNG) increased by 2.47% in the most recent trading session. This is why.

The stock price of DraftKings (DKNG) increased by 2.47% in the most recent trading session.

Why: Research report

Price target: $15

Rating: Hold

Analyst firm: Stifel

Stifel analysts adjusted the rating while noting that the shares have effectively round-tripped back close to the initial $10 per share levels following significant outperformance in 2020. This share price discounts DraftKings’ considerable long-term growth prospects as it is about 17% F5Y revenue CAGR. Plus, conservative 2023 guidance likely positions DraftKings for a steady beat and raise story with an opportunity to the right-size cost structure in a more rational promotional environment.

But profitability remains several quarters away and the analysts see the risk of market share compression as the company rationalizes customer acquisition spending and as several well-capitalized competitors make their U.S. debut. For the long term, the analysts are expecting the stock to be worth over $40 per share.