One day prior to its first public earnings report, sports-gambling company DraftKings Inc. (NASDAQ:DKNG) got a "positive" rating from Susquehanna Financial, with a price target implying upside of over 20% from current prices. Analyst Joseph Stauph's $33 price target is the highest among the four analysts following the company, well above the $24 average prior to today's rating.
Known for its daily fantasy sports and mobile sports-betting platform, DraftKings began trading on the Nasdaq Stock Market on April 24, 2020. Analysts see the company as a big beneficiary of the trend for legalized sports gambling in the U.S.
Morgan Stanley analyst Thomas Allen called it "almost a pure play," according to TheStreet, with more room to grow as only 18 states have currently legalized sports gambling so far. Allen said the U.S. market could grow to $12 billion by 2025 from under $2 billion currently.
Earlier this week, it was revealed that well-known investor George Soros held 2.7 million shares of DraftKings' Class A stock through his investment company. DraftKings also revealed in a Securities and Exchange Commission filing that other investors include the Walt Disney Co., owner of ESPN, and the National Hockey League, according to Marketwatch.
Susquehanna analyst Stauph called DraftKings the "market leader in the US," noting that it has been operating for seven years and has 12 million registered users. The company reports first-quarter 2020 results tomorrow morning, May 15.