TLDR
- Benchmark maintained its Buy recommendation on DKNG with $29 price objective; shares trading at $25.15
- DKNG shares have plunged 45% in the last half-year, touching a 52-week bottom at $21.01
- Week 9 saw New York’s online sports betting revenue jump 68% annually despite handle falling 10%
- Insider Harry Sloan, a Director, acquired 100,000 DKNG shares worth approximately $2.19M during February; insider ownership stands at 51.19%
- Among 31 Wall Street analysts, 25 recommend buying DKNG, with consensus price objective at $37.19
Shares of DKNG have experienced significant turbulence. Over the last six months, the stock has plummeted 45%, trading at $25.15 as of Friday’s close — substantially below its 52-week peak of $48.78.
Even with this dramatic pullback, Benchmark analyst Mike Hickey maintained his Buy recommendation alongside a $29 price objective. InvestingPro has included DKNG among its Most Undervalued selections.
Wall Street’s analyst consensus aligns with this bullish perspective. Among 31 analysts tracking the company, 25 assign Buy ratings, four suggest Hold positions, and two recommend Sell. The consensus price objective stands at $37.19.
The substantial spread between the current trading price and analyst expectations is noteworthy.
Recent sports betting performance data from New York provided encouraging signals. During Week 9, total handle declined 10% on an annual basis, yet revenue skyrocketed 68%, propelled by a 9.0% hold rate — representing a 420-basis-point improvement from the 4.8% recorded in the prior-year period.
DraftKings specifically experienced a 27.7% year-over-year decline in handle during that timeframe. However, revenue exploded 442.1% annually as the hold rate expanded to 8.8%, versus merely 1.2% twelve months earlier. That previous year’s metric represented an abnormally weak comparison.
Rival operator PENN recorded a 5.1% handle decrease alongside 110.1% revenue growth, with hold expanding to 10.2%. The metrics suggest favorable conditions for sportsbook operators industry-wide.
Insider and Institutional Activity
Regarding insider transactions, Director Harry Sloan purchased 100,000 DKNG shares on February 17 at an average price of $21.85 per share, investing approximately $2.19 million. This transaction elevated his total stake to 350,219 shares.
Chief Accounting Officer Erik Bradbury executed a sale in the opposite direction, offloading 2,883 shares on March 3 at $24.56, trimming his holdings by 7.02%. Collectively, company insiders control 51.19% of outstanding shares.
Dynamic Technology Lab Private Ltd established a fresh position during Q3, acquiring 57,031 shares valued at approximately $2.13 million. Multiple smaller institutional investors similarly added or initiated stakes during the quarter.
ESPN Integration and Product Expansion
DraftKings revealed an account-linking partnership with ESPN strategically timed for March Madness. The collaboration enables users to access a “Bet Your Bracket” feature that synchronizes with ESPN Tournament Challenge to deliver customized wagering recommendations.
The operator continues advancing its Super App initiative, unifying Sportsbook, Casino, Predictions, and Lottery capabilities within a single platform. Wall Street firms including Bernstein, Wells Fargo, and Needham have highlighted the predictions offering and consolidated application as key catalysts for expansion.
Wells Fargo reaffirmed its Overweight stance with a $30 price objective. Bernstein elevated its target to $30 while maintaining an Outperform rating. Needham continues recommending Buy with a $35 target.
Truist reduced its price objective from $45 to $33 but preserved its Buy rating. Mizuho trimmed expectations from $46 to $44 while sustaining its Outperform recommendation.
DKNG’s 50-day moving average currently sits at $28.82, with the 200-day at $34.00. The company’s market capitalization stands at $12.38 billion. The equity exhibits a beta of 1.67 and carries a debt-to-equity ratio of 2.91.
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