TLDR
Contents
- Benchmark maintained Buy rating on DKNG stock with $29 price objective; shares trading at $25.15
- Shares have plummeted 45% in the last six months, reaching 52-week low of $21.01
- Week 9 New York online sports betting revenue jumped 68% year-over-year despite handle falling 10%
- Insider Director Harry Sloan purchased 100,000 shares worth approximately $2.19M in February; insider ownership at 51.19%
- Wall Street consensus shows 25 Buy ratings out of 31 total analysts, with $37.19 average price objective
DraftKings shares have experienced significant turbulence recently. The sports betting giant’s stock price has tumbled 45% during the past half-year, currently trading at $25.15 as of Friday’s close — significantly below its 52-week peak of $48.78.
Despite this substantial downturn, Benchmark analyst Mike Hickey has reaffirmed his Buy recommendation along with a $29 price objective. InvestingPro has included DKNG in its Most Undervalued category.
Wall Street’s analyst community largely shares this optimistic perspective. Among 31 analysts tracking the company, 25 assign Buy ratings, four recommend Hold positions, and just two suggest Sell. The consensus price target stands at $37.19.
This significant disconnect between the current trading price and analyst expectations is noteworthy.
Recent sports betting metrics from New York provided encouraging signals. During Week 9, while overall betting handle decreased 10% compared to the previous year, revenue soared 68%, propelled by a hold percentage of 9.0% — representing a 420 basis point increase from the prior year’s 4.8%.
DraftKings specifically experienced a 27.7% year-over-year decline in handle during this timeframe. However, revenue skyrocketed 442.1% year-over-year as the hold percentage expanded to 8.8%, versus merely 1.2% twelve months earlier. The previous year’s figure represented an anomalously low comparison.
Rival PENN experienced a 5.1% handle decline alongside 110.1% revenue growth, with hold percentage rising to 10.2%. These figures suggest strong operator performance industry-wide.
Insider and Institutional Activity
Regarding insider transactions, Director Harry Sloan acquired 100,000 DKNG shares on February 17 at an average price of $21.85 per share, totaling approximately $2.19 million. This transaction increased his total stake to 350,219 shares.
CAO Erik Bradbury executed the opposite move, divesting 2,883 shares on March 3 at $24.56, decreasing his holdings by 7.02%. Collectively, company insiders control 51.19% of outstanding shares.
Dynamic Technology Lab Private Ltd established a new position during Q3, acquiring 57,031 shares valued at approximately $2.13 million. Multiple smaller investment firms also increased or initiated stakes during this quarter.
ESPN Integration and Product Expansion
DraftKings revealed an account-linking partnership with ESPN scheduled to coincide with March Madness. This collaboration will enable users to utilize a “Bet Your Bracket” functionality that integrates with ESPN Tournament Challenge to deliver customized betting recommendations.
The company continues advancing its Super App initiative, consolidating Sportsbook, Casino, Predictions, and Lottery offerings into a single platform. Analysts from Bernstein, Wells Fargo, and Needham have highlighted the predictions feature and unified application as key catalysts for expansion.
Wells Fargo reaffirmed its Overweight rating alongside a $30 price objective. Bernstein elevated its target to $30 while maintaining an Outperform rating. Needham holds a Buy recommendation with a $35 target.
Truist reduced its target from $45 to $33 but retained a Buy rating. Mizuho trimmed its objective from $46 to $44 while sustaining an Outperform rating.
DKNG’s 50-day moving average sits at $28.82 with its 200-day at $34.00. The company’s market capitalization is $12.38 billion. Shares carry a beta of 1.67 and the company maintains a debt-to-equity ratio of 2.91.
