After BetMGM secured license in Virginia, DraftKing is the second sports betting brand to launch…
Posted on: March 10, 2021, 10:24h.
Final up to date on: March 10, 2021, 12:32h.
Todd Shriber Learn Extra
DraftKings (NASDAQ:DKNG) is on tempo for one among its greatest days since its debut final April as market members embrace one other spherical of bullish commentary from sell-side analysts and assist for the identify from a famed investor.
ARK Make investments founder Cathie Wooden. Her agency continues shopping for massive quantities of DraftKings inventory. (Picture: Barron’s)
In noon buying and selling, shares of the sportsbook operator are greater by almost 10 % — an indication the Boston-based firm is incomes glowing evaluations following its March 9 investor day. Yesterday, the operator informed buyers the North American iGaming and on-line sports activities wagering markets may finally be price $67 billion.
DraftKings added that the US sports activities betting enterprise might be price $22 billion at maturity and it raised its long-term earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA) forecast to $1.7 billion.
In our view, DKNG gives one of many higher person experiences given product innovation, huge choices and seamless UI,” mentioned Macquarie analyst Chad Beynon in a observe.
“As well as, following the third-quarter SBTech migration, which is able to bear monetary synergies, this might additional unlock the flexibility to correctly curate/suggest customized gadgets in addition to create new and revolutionary content material,” Beynon added.
Beynon lifts his value goal on the inventory to $73 from $71 whereas reiterating an “outperform” ranking. That new forecast implies upside of virtually 18 % from the March 9 shut.
Extra ARK Assist for DraftKings Inventory
One other catalyst for right now’s DraftKings upside is the continuing assist of the identify from Cathie Wooden’s ARK Funding Administration, which has not too long ago been feasting on the shares.
Yesterday, the cash supervisor issuer purchased 949,000 shares of DraftKings for the ARK Innovation ETF (NYSEARCA:ARKK) — the agency’s flagship change traded fund (ETF). That buy follows a purchase of 748,201 shares allotted to ARKK on Monday and the acquisition of 56,900 shares directed to a different ARK fund on the identical day.
ARK began shopping for DraftKings inventory in February, initially together with the identify within the ARK Subsequent Technology ETF (NYSEARCA:ARKW) and later the ARK Fintech Innovation ETF (NYSEARCA:ARKF).
The inclusion of DraftKings within the Innovation ETF is a powerful endorsement of the inventory as a result of that fund has $17.68 billion in property below administration, making it the most important actively managed ETF within the US. The gaming fairness accounts for 0.47 % of that fund’s weight.
Throughout the three aforementioned ETFs, ARK holds roughly 3.7 million DraftKings shares. On that foundation, the fund supervisor is now the Twelfth-largest institutional proprietor of the fairness.
Extra Good Vibes
It wasn’t simply Beynon and Wooden contributing to right now’s surge by DraftKings inventory. A minimum of a half dozen different analysts made optimistic feedback on the identify following the investor with a number of becoming a member of Beynon in boosting value targets.
Needham analyst Chris Pierce highlighted “1) DKNG bumping up the low finish of potential iGaming market share; 2) Additional commentary round a possible oligopoly market construction creating, which stands to learn DKNG as a market chief; 3) A smattering of doubtless bullish OSB nuggets: unlawful market conversion nonetheless within the early innings, DKNG’s buyer make-up of informal vs VIP gamers, & in-game wagering as a possible differentiator as DKNG is ready to leverage the SBTech integration.”
He has a “purchase” ranking and an $80 forecast on the inventory.
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