TLDR
- Benchmark reiterated a Buy rating on DKNG with a $29 price target; stock currently trades at $25.15
- DKNG has dropped 45% over the past six months, hitting a 52-week low of $21.01
- New York online sports betting revenue surged 68% year-over-year in Week 9 despite a 10% handle decline
- Director Harry Sloan bought 100,000 DKNG shares for ~$2.19M in February; insiders own 51.19% of the company
- 25 of 31 analysts rate DKNG a Buy, with an average price target of $37.19
DKNG has had a rough ride. The stock has fallen 45% over the past six months, sitting at $25.15 as of Friday — a long way from its 52-week high of $48.78.
Despite that slide, Benchmark analyst Mike Hickey reiterated a Buy rating and $29 price target on the stock. InvestingPro has placed DKNG on its Most Undervalued list.
The broader analyst community agrees with that view. Of 31 analysts covering the stock, 25 rate it a Buy, four a Hold, and two a Sell. The average price target sits at $37.19.
That gap between current price and average target is hard to ignore.
Recent New York sports betting data gave some reason for optimism. In Week 9, overall handle fell 10% year-over-year, but revenue surged 68%, driven by a hold rate of 9.0% — up 420 basis points from 4.8% the prior year.
DraftKings itself saw handle drop 27.7% year-over-year in that same period. But revenue jumped 442.1% year-over-year as hold expanded to 8.8%, compared to just 1.2% a year ago. That prior-year figure was an unusually low comp.
Competitor PENN saw handle down 5.1% and revenue up 110.1%, with hold climbing to 10.2%. The numbers point to a good week for operators across the board.
Insider and Institutional Activity
On the insider front, Director Harry Sloan bought 100,000 DKNG shares on February 17 at an average of $21.85 each, spending roughly $2.19 million. That brought his total holding to 350,219 shares.
CAO Erik Bradbury moved in the other direction, selling 2,883 shares on March 3 at $24.56, reducing his position by 7.02%. Insiders as a group own 51.19% of the company.
Dynamic Technology Lab Private Ltd opened a new position in Q3, picking up 57,031 shares valued at roughly $2.13 million. Several smaller firms also added or initiated positions during the period.
ESPN Integration and Product Expansion
DraftKings announced an account-linking deal with ESPN timed to March Madness. Users will be able to access a “Bet Your Bracket” feature that integrates with ESPN Tournament Challenge to offer personalized betting suggestions.
The company is also pushing ahead with its Super App strategy, combining Sportsbook, Casino, Predictions, and Lottery under one roof. Analysts at Bernstein, Wells Fargo, and Needham have all cited the predictions product and unified app as growth drivers.
Wells Fargo reiterated an Overweight rating with a $30 target. Bernstein raised its target to $30, keeping an Outperform rating. Needham holds a Buy with a $35 target.
Truist cut its target from $45 to $33 but kept a Buy. Mizuho trimmed from $46 to $44 while maintaining Outperform.
DKNG’s 50-day moving average stands at $28.82 and its 200-day at $34.00. Market cap is $12.38 billion. The stock has a beta of 1.67 and a debt-to-equity ratio of 2.91.
