On Monday, BTIG updated its outlook on DraftKings Inc. (NASDAQ: NASDAQ:DKNG), raising the stock's price target to $55 from $53 and maintaining a Buy rating. The firm's analyst cited a number of positive factors influencing the decision, including higher yearly estimates and the potential for further positive revisions throughout the year.
The analyst praised the company's recent performance and future potential, noting the bullish qualitative takeaways from last week's conference call. The call highlighted DraftKings' marketing efficiency, scaling benefits, increasing user engagement, rising per capita spend, and the overall growth potential in the industry.
DraftKings' operational highlights include the anticipated Jackpocket acquisition, expected to close around mid-2024, and a potential buyback authorization announcement aligned with second-quarter 2023 earnings. The analyst also suggested the approach of the football season could bring more activity.
The company's first quarter of 2024 was described as less exciting compared to previous ones, but the outlook for the second quarter remains healthy. The analyst pointed out that strong data from New York in April and the current guidance do not rely heavily on promotional leverage, indicating a solid foundation for the company's performance.
InvestingPro Insights
Complementing BTIG's optimistic outlook, InvestingPro data suggests that DraftKings (NASDAQ: DKNG) operates with a dynamic growth profile. The company's revenue has seen a substantial increase, with a growth rate of 57.0% over the last twelve months as of Q1 2024. This aligns with the analysts' expectations of sales growth in the current year. While the company has not been profitable over the last twelve months, analysts predict that DraftKings will turn the corner and achieve profitability this year.
Investors should note that the stock has experienced a high return over the last year, with a 70.14% increase in the one-year price total return. This level of performance is indicative of DraftKings' volatile but rewarding nature for shareholders. With a market capitalization of $19.92 billion and a high Price / Book multiple of 23.97, the company is trading at a premium, reflecting its high-growth prospects and the market's confidence in its future profitability.
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