Goldman Sachs Starts DraftKings Inc. (DKNG) at Buy, 'Inflecting Profitability as Unit Economics Improve'

Goldman Sachs analyst Ben Miller initiates coverage on DraftKings Inc. (NASDAQ: DKNG) with a Buy rating and a price target of $60.00.

The analyst comments "We initiate coverage of DraftKings (DKNG) with a Buy rating and a 12-month price target of $60 (36% upside from current trading price). Our Buy rating reflects our framing of a more attractive 12m risk/reward as: 1) We expect DraftKings to compound revenue at 20%+ as it continues to benefit from healthy growth in existing states, as well as future state legalizations across OSB & iGaming; 2) Unit economics, including contribution margin and LTV/CAC dynamics, continue to improve at an increasingly better pace; 3) We see 2-3% upside to Street Revenue in 2024/2025 & 3-4% upside to Street Adj. EBITDA & 4) While the stock is up ~65% over the past 9 months, DKNG is trading at a growth adjusted revenue multiple of 0.15x (vs. its historical average of 0.19x and peers currently trading at 0.17x), which is down ~20% over the same time period."

For an analyst ratings summary and ratings history on DraftKings Inc. click here. For more ratings news on DraftKings Inc. click here.

Shares of DraftKings Inc. closed at $43.72 yesterday.

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