Shares of DraftKings (NASDAQ:DKNG) were up 5.4% by the close of trading on Thursday, just a few hours before the opening game of the National Football League's 2020 season.
Despite a dearth of live sports during the coronavirus pandemic, legal sports betting revenue jumped 18.9% year over year during the first seven months of 2020, according to the American Gaming Association. That growth is accelerating, with the resumption of live games in major sports leagues like the National Basketball Association helping to fuel an 86.2% surge in sports betting in July. Now, with the most popular sport in America about to begin its much-awaited season, sports betting could be set to soar.
DraftKings, in particular, stands to benefit from the return of football games. In addition to offering betting services, DraftKings is the official daily fantasy sports partner of the NFL.
Analysts see plenty of upside ahead for DraftKings investors. On Wednesday, Evercore analyst Kevin Rippey placed an outperform rating and $60 target price on DraftKings' stock. Rippey contends that it's likely to add customers rapidly as more states legalize online sports betting in the coming years. If he's right, Rippey's price forecast represents potential gains for investors of more than 40%, compared to the stock's closing price of $42.54 on Thursday.