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