[이데일리 유재희 기자] The share price of Draft Kings (DKNG), an online casino and sports betting platform operator in the US, has soared 120% this year, and is expected to rise further. This is because the growth potential is great depending on the penetration of new markets.
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According to American economic media outlets CNBC and Barron’s on the 22nd (local time), Robin Farley, an analyst at UBS, raised his investment view on Draft Kings from ‘Neutral’ to ‘Buy’ and raised his target price to $30 from $19 previously . • increased by 58%. On this day, the stock price of Draft Kings closed at $25.22, up 4.6% from the previous day, breaking the 52-week high once again. According to Robin Farley’s analysis, it means it can rise 20% in the future.
Draft Kings broke through the $70 mark in March 2021 with the benefit of the Corona 19 pandemic, but it also fell below $10 in May last year with Endemic. However, this year, it shows an increase of 120% due to the over perception of the decline and expectations for growth. In particular, on the 5th, Draft Kings announced its first quarter results and raised its annual guidance, showing confidence in growth. This is because the trend of improvement is becoming evident, with monthly active users and sales per player increasing by mid to high 30%, respectively.
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Draft Kings is a sports betting operator and online casino platform founded in 2011. In particular, it ranks first with a 30% share of the US sports betting market. Draft Kings shows steep growth in sales. After growing 110% in 2021, it showed a growth rate of 73% last year, and sales growth of 40% is expected this year. In 2018, the US federal government’s sports betting ban was ruled ‘unconstitutional’. As a result of this ruling, sports betting is now allowed in 33 of the 50 states in the United States. Six states have allowed online casinos. The area allowed increases every year.
Robin Farley noted that new state expansion is accelerating. “DraftKings currently operates an online sports betting or casino service in 23 states, and the market is expanding faster,” he said.
Robin Farley raised his earnings estimates to reflect this growth momentum and Draft Kings earnings guidance. This is the basis for raising the target price significantly.
Draft Kings revenue forecast for this year rose from $2.91 billion to $3.19 billion. Robin Farley predicts the company will grow compound sales at a CAGR of 20% through 2026. “Gross margins are expected to rise 0.5 percentage points from the previous year to 39.3% this year and break through 40% next year ,” he said.
Meanwhile, Wall Street’s opinion on Draft Kings is somewhat mixed. Only 19 out of 34 analysts (56%) maintain a buy opinion (including being overweight and outperforming the market).
The highest price target is $39 and the lowest price target is $17. The average target price is $27.42, which is 9% above the day’s closing price.
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