DraftKings (NASDAQ:DKNG) has been a popular stock over the past few months as various U.S. states made moves to legalize sports gambling. One noted analyst thinks it still has plenty of room to continue rising.

On Tuesday, analyst Vitaly Umansky of Sanford C. Bernstein initiated coverage on the company. His initial recommendation is an unhesitating outperform (buy, in other words) at a price target of $71 per share. That's more than 31% above the stock's most recent closing price.

Umansky is fond of DraftKings because it's a pure and solid play on the hot segment of sports gambling. Additionally, he wrote in his research note that the company's "...daily fantasy sports player database creates lower customer cost of acquisition as well as incremental cross-selling opportunities into iGaming (where [he] still give[s] limited value)."

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The analyst also believes that DraftKings is about to attract scores of new and regular customers. He's forecasting a compound annual growth rate of 20% through 2030 in the company's tally of daily active users (DAUs), a frequently used metric of engagement for online businesses.

While that 20% might be somewhat rich given that it's forecast to be the average over nearly a decade, it's believable that DraftKings will keep adding users who bet on a regular (or semi-regular) basis, particularly since more states might legalize sports gambling after witnessing the tax revenues it can generate. 

Bernstein wasn't the only researcher giving the thumbs-up to DraftKings on Tuesday. Goldman Sachs lifted its existing recommendation on the stock to buy from neutral, and raised its price target by $20 to $65 per share.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.