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DraftKings: Intriguing Catalysts Make this Stock Attractive

DraftKings (NASDAQ:DKNG), a top online sports gambling platform, has been making all the right moves. The company has been focusing on acquisitions and partnerships to increase its...
DraftKings: Intriguing Catalysts Make this Stock Attractive © Reuters. DraftKings: Intriguing Catalysts Make this Stock Attractive

DraftKings (NASDAQ:DKNG), a top online sports gambling platform, has been making all the right moves.

The company has been focusing on acquisitions and partnerships to increase its offerings, and propel its growth. DKNG stock is now up by over 40% year-to-date, with the share price hovering over $62.

The online betting platform, which comes with a valuation of more than $25 billion, has benefited from highly impressive Q2 results, and is appearing more and more like a great pick at this valuation. (See DKNG stock charts on TipRanks)

That's not to say this stock is cheap. The company trades at 16.4 times forward revenue. However, given the growth this stock has shown, and the risk capital that's going into the market right now, anything is possible these days.

Let's take a look at a couple of the key catalysts that investors are betting will boost this gambling stock from here. I am slightly bullish on the stock.

GNOG Deal Could Greatly Benefit DKNG Stock

DraftKings announced its plan to acquire Golden Nugget Online Gaming (GNOG) on August 9. This acquisition would be an all-stock transaction valuing GNOG $1.56 billion.

Investors are hoping that the company's acquisition could further boost DraftKings' already-impressive growth rate. The deal is expected to add $160 million in revenue to DraftKing's fast-growing top line.

Another notable aspect investors are focused on is market share. The online gambling market remains increasingly fragmented. By consolidating a key competitor, DraftKings also gains access to the crucial New Jersey, Michigan, and Texas markets.

Golden Nugget has a strong presence in the New Jersey online gambling industry with over 9% market share. By acquiring GNOG, DraftKings can combine its operations with that of GNOG in Michigan, West Virginia and New Jersey, thereby boosting its gross margins.

Major Deals for Upcoming NFL Season

The football season in the U.S. can be characterized as nothing less than a massive craze. DraftKings has already prepared itself to make the most of the NFL season, which kicked off on Thursday.

The company's platform has over 1.1 million monthly active users. The company has been selected as one of the NFL’s exclusive sports betting partners, while Genius Sports (GENI) has been given the exclusive distributorship of official statistics and sports betting data.

DraftKings has strategically entered into a deal with Genius Sports, whereby DraftKings will get access to Genius' data and content, while Genius will get DraftKings' data-driven advertising tech.

DKNG has also entered into a deal with Simplebet. Simplebet is a tech company that deals with micro-betting. This deal will allow DraftKings to offer Simplebet’s products and services to its users throughout NFL, MLB, and NCAA tournaments.

Wall Street's Take

According to TipRanks' analyst rating consensus, DraftKings stock is a Moderate Buy. Out of 14 analyst ratings, there are 10 Buy recommendations, and four Hold recommendations.

The average DKNG price target is $70.85. The analyst price targets range from a high of $105 per share, to a low of $51 per share.

Bottom Line

Investors are paying up for quality these days. Indeed, the quality of DraftKings' existing growth has been impressive. Given the company's various acquisitions and strategic deals of late, there's a lot to like about the story.

Of course, downside risks should be taken into consideration with this stock. Any number of factors could derail DraftKings' trajectory and momentum.

However, for now, DraftKings stock looks like it's on a hot streak. As they say, you never leave the table when you're on a hot streak.

Disclosure: At the time of publication, Chris MacDonald did not have a position in any of the securities mentioned in this article

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

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24-09-2021 15:38:02 (UTC+7)

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 EUR/JPY129.54Neutral
 EUR/CHF1.0849Sell
 Gold1,755.45Neutral
 Silver22.688Neutral
 Copper4.2252Neutral
 Crude Oil WTI73.44↑ Buy
 Brent Oil77.56↑ Buy
 Natural Gas5.059Buy
 US Coffee C193.38Neutral
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 S&P 5004,448.98↑ Sell
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 Hang Seng24,130.00Buy
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 IBEX 358,860.50↑ Buy
 BASF63.840↑ Buy
 Bayer46.44Neutral
 Allianz192.68↑ Buy
 Adidas280.68↑ Buy
 Lufthansa6.225↑ Buy
 Siemens AG149.03↑ Buy
 Deutsche Bank AG10.720↑ Buy
Mua/Bán 1 chỉ SJC
# So hôm qua # Chênh TG
SJC Eximbank5,655/ 5,705
(-20/ -20) # 871
SJC HCM5,640/ 5,705
(-30/ -30) # 871
SJC Hanoi5,640/ 5,707
(-30/ -30) # 873
SJC Danang5,640/ 5,707
(-30/ -30) # 873
SJC Nhatrang5,640/ 5,707
(-30/ -30) # 873
SJC Cantho5,640/ 5,707
(-30/ -30) # 873
Cập nhật 24-09-2021 15:38:05
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ↀ Giá vàng thế giới
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RON 95-IV2149021910
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DO 0.05S1602016340
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Dầu hỏa1508015380
ↂ Giá dầu thô thế giới
WTI$73.45-0.69-0.94%
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$ Tỷ giá Vietcombank
Ngoại tệMua vàoBán ra
USD22.630,0022.860,00
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GBP30.430,7031.702,11
JPY200,85212,47
KRW16,7620,40
Cập nhật lúc 15:30:28 24/09/2021
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