Please ensure Javascript is enabled for purposes of website accessibility

Why DraftKings Is Jumping Almost 5% Higher Today

By Rich Duprey - Updated Feb 19, 2021 at 4:01PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's a good bet the daily fantasy-sports and sports-betting leader has more growth in store.

What happened

Shares of DraftKings (DKNG 2.17%) were running 4.6% higher in afternoon trading Friday, while the broad market index was flat after an analyst at Oppenheimer raised his price target on the fantasy-sports and sports-betting leader.

So what

DraftKings is already one of the top sportsbooks in the country alongside Flutter Entertainment's FanDuel. Oppenheimer analyst Jed Kelly sees DraftKings generating over $1 billion in revenue in 2021, which would be a near doubling of its fiscal 2020 performance.

DraftKings sportsbook app on smartphone.

Image source: DraftKings.

In November, the sportsbook raised its current year revenue outlook to a range of $540 to $560 million and introduced projections for 2021 of $750 million to $850 million. Kelly believes a review of state-betting results indicates DraftKings will raise its guidance for the coming year when it reports earnings on Feb. 26.

Now what

Because Virginia and Michigan introduced sports betting last month, the analyst told investors in a research note he believes DraftKings online casino gambling market-share gains will help push the company to raise guidance, particularly if January trends continue to hold.

As a result, Kelly raised his price target on DraftKings from $60 per share, where it's currently trading, to $80 per share, a 33% increase. The sportsbook went public in April 2020 at a price of $52 per share via a reverse merger with a special purpose acquisition company (SPAC) instead of a traditional initial public offering (IPO).

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

DraftKings Inc. Stock Quote
DraftKings Inc.
DKNG
$14.16 (2.17%) $0.30
Oppenheimer Holdings Inc. Stock Quote
Oppenheimer Holdings Inc.
OPY
$33.61 (2.19%) $0.72
Flutter Entertainment PLC Stock Quote
Flutter Entertainment PLC
PDYPF
$114.00 (0.04%) $0.04

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
328%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.