Please ensure Javascript is enabled for purposes of website accessibility

Why DraftKings Stock Surged Today

By Joe Tenebruso - Mar 1, 2021 at 5:30PM

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

Analysts are growing more bullish on the sports betting company's growth potential.

What happened

Shares of DraftKings (DKNG -0.85%) climbed 11.7% on Monday after several analysts hiked their targets for the online gambling leader's stock price. 

So what

For one, Goldman Sachs analyst Stephen Grambling repeated his buy rating on DraftKings' shares and lifted his price forecast from $71 to $73. Following its impressive fourth-quarter performance -- DraftKings' revenue soared 146% year over year to $322 million -- Grambling raised his projections for the company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).

A person is pointing to an upwardly sloping stock chart.

Investors bid up DraftKings' stock price on Monday. Image source: Getty Images.

For another, Canaccord Genuity analyst Michael Graham reiterated his buy rating on the stock and boosted his price estimate from $65 to $80. Graham praised DraftKings' strong competitive position within the rapidly expanding online gambling market. He also posited that DraftKings' revenue growth in 2021 could come in even higher than the 40% to 55% increase management predicted. 

Now what 

More than $150 billion worth of illegal bets is placed on sporting events every year in the U.S. alone, according to the American Gaming Association. DraftKings, in turn, has plenty of room to continue to chip away at this massive black market as more states move to legalize sports betting. Investors should thus expect the online gambling platform to continue to grow at an impressive clip in the coming years.

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.
$14.03 (-0.85%) $0.12

*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
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/21/2022.

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.