Although shares of fantasy sports and online sportsbook company DraftKings (NASDAQ:DKNG) are sliding lower so far in Monday trading, at least one major Wall Street analyst thinks the company's prospects look bright. According to Needham analyst Brad Erickson, DraftKings is well positioned to benefit from online sports betting's continued spread into additional American states

Needham gave DraftKings a price target of $70 Monday, representing a 67% upside compared to its current share price of approximately $42. The firm also gives DraftKings a buy rating. Erickson explained the growth of sports betting legalization across the United States is "a rising tide for the industry" and said DraftKings specifically "has clear first-mover, brand and capital advantages" relative to its competitors.

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Erickson's research note also cited DraftKings' success in New Jersey and Pennsylvania as evidence the stock could be ready for major growth. He points out DraftKings gained market share in Pennsylvania despite competition from Barstool Sports, partner of Penn National Gaming. CFO Research reports the company's market penetration in terms of mobile sports betting now extends to 10 states in the U.S., surpassing its rivals.

DraftKings reported robust quarterly growth last Friday, Nov. 13, while also providing upbeat 2020 and fiscal 2021 guidance. The company has seen several notable one-day gains based on various news this month, but remains below its early October peak, when it rocketed to nearly $64 per share. The stock's value collapsed by almost 40% later in the month after it sold 32 million shares. 

While the company's marketing spend remains high, it appears to be continuing a trajectory of solid growth, lending some weight to Needham's forecasts.

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