DraftKings (DKNG) stock may see $45 before $65 – Idaho Reporter


DraftKings (DKNG) stock may see $45 before $65

DKNG stock was on fire for months, are we listening to the wind of change right now?

The economic fallout from the pandemic has left some companies fighting for their lives, worrying whether their business models will still be relevant in the “new normal” when the virus is finally brought under control.

Online sports and betting providers like DraftKings (NASDAQ:DKNG) are not included.

The lifting of gambling restrictions in many states in the United States offers great opportunities for online sports betting. But not only investors are ready to benefit.

Gambling is hot

With this in mind, sports betting and gaming providers like DraftKings can do what others in Covid-19-ravaged industries can’t: YoY profit jumps.

After the return of live sports, DraftKings recently issued a directional outlook for the year, which indicates its favorable position in taking advantage of the pent-up demand for online sports betting.

While the bears will be quick to point out that a second wave of Covid could put live sports back on the bank and stall dynamism in the sports betting industry, DraftKings already demonstrated its strength during the first wave of the pandemic, during which the share price has more than doubled since the $ 20 IPO.

But DKNG cannot go ALWAYS up

And some of the prominent analysts think how DKNG is way too overpriced. The time for selloff has come, in the words of Mr. Gerber regarding recent stock offering:”They are cashing out a billion to the owners. And another billion to the company. The company is losing a ton and is worth $10 B – which is generous in my mind. $500 mil rev. Losses its whole history. This is a total stock dump” adding that “Real gamblers want real comps. That’s how it works. Small timers don’t care. I like Draftkings app but how long will I just deposit money to lose. And get little back?”

Investors aren’t the only ones keeping an eye on online sports betting companies like DraftKings. Governments are also starving for new tax revenue.

There is also growing competition and customer loyalty is in question as bettors can easily jump from one app to another.

Gaming analysts tend to be more conservative when it comes to online sports betting companies, Barry Jonas, analyst at Truist Securities said. You see increasing competition and regulatory risks, including states in fiscal trouble that could easily try to divert corporate profits as taxes rise.

Penn National Gaming Inc (NASDAQ: PENN ) launched its online sports betting facility in Pennsylvania this week. Penn bought a 36% stake in Barstool Sports, a digital sports media company that already has more than 56 million followers on social media. And DraftKings spent $200 million in a single quarteron advertising, while PENN acquired 36% of Barstool for $136 million.


Then there’s the BetMGM sports betting app from MGM Resorts (NYSE: MGM ). In a major vote of confidence, IAC (NASDAQ: IAC ) announced last month that it had acquired a 12% stake in MGM valued at around $ 1 billion, specifically pointing out that online gaming revenue is massive Represent an opportunity that is still emerging.

While DraftKings is all the rage, Penn, Barstool and MGM are already household names. And they all compete against each other. To add LCA (Golden Nugget) on that pile and we have one good pile of competitors that DKNG needs to compete against.

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