Shares of Golden Nugget Online Gaming (GNOG) were running 11% higher in afternoon trading Tuesday after an analyst initiated coverage of the online casino operator with a buy rating.
Jefferies (JEF 3.07%) analyst David Katz said Golden Nugget has proved itself in New Jersey, the foremost state for online gambling in both casino games and sports betting. He says its performance last year indicates it can establish a low double-digit share of the market and there is "100+% potential upside."
Golden Nugget was by far the largest player in New Jersey, generating $319 million in internet gambling gross revenue in 2020, up 80% from the year before. MGM Resorts International's (MGM -2.55%) Borgata was second with $209 million, followed closely by Resorts Digital at $208 million.
With expansion to other states underway and the growth of sports betting in New Jersey and elsewhere, Golden Nugget has plenty of opportunity to see its market share rise. It generated $1.5 million in gross revenue on sports wagering last year, well behind industry leaders DraftKings (DKNG -0.04%) and FanDuel.
Katz set a $28 price target on Golden Nugget stock, more than twice the $13.79 that the shares closed at yesterday.