Sports-gambling company DraftKings (NASDAQ:DKNG) released its first earnings report as a public company last week, after its initial public offering on April 24, 2020, through a merger with a special purpose acquisition company (SPAC). Though it reported a 30% increase in year-over-year revenue, the newly public company also reported a net loss more than twice as high as a year ago. 

While Morgan Stanley analyst Thomas Allen doesn't think the sports-betting platform will be profitable until at least 2023, and has a current price target of $25 -- below the current market price -- he also has a bullish case where he believes the stock could reach $75, according to a Barron's report. 

Three friends holding smartphones cheer at a sports bar.

Image source: Getty Images.

Throughout the drought of sporting events caused by COVID-19 restrictions, DraftKings has generated revenue with its iGaming platform as well as with betting on non-major sporting events and esports, including simulated NASCAR races.

According to the report, the analyst believes a COVID-19-related second-quarter revenue drop will be less severe, and revenue growth will return in the third quarter. He wrote in a note after earnings, "Who knew Fantasy Korean Baseball was so popular." 

DraftKings and FanDuel (which is part of British company Flutter Entertainment (OTC:PDYP.Y)) are the two major platforms for online sports and sports fantasy betting. With only 18 U.S. states having legalized sports gambling to date, the bullish case for DraftKings as the only pure play in the U.S. is that the market has room to grow.

"We believe the market is going to rightfully value DraftKings more similar to high-growth internet stocks rather than EU online gaming stocks," Allen wrote.