Needham & Company Starts DraftKings Inc. (DKNG) at Buy, Sports Betting Market Seen Between $42-$58B Per Year

September 30, 2020 4:13 PM EDT
Get Alerts DKNG Hot Sheet
Price: $50.16 --0%

Rating Summary:
    21 Buy, 7 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 9 | New: 21
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Needham & Company analyst Brad Erickson initiates coverage on DraftKings Inc. (NASDAQ: DKNG) with a Buy rating and a price target of $70.00.

The analyst commented, "We view DKNG as one of the leading beneficiaries as online sports betting and gambling take off in the U.S. - an opportunity we size between $42 and $58 billion annually longer-term. We expect the regulatory tailwind to persist and believe online providers' access to data creates a structurally better user experience vs. brick & mortar. Thanks to DKNG's data-centric approach to customer acquisition and its leading brand & marketing approach, we believe the company could regularly exceed top-line forecasts, although near-term, we suspect EBITDA expectations could be too aggressive. We initiate coverage with a $70 target based on an EV/revenue multiple of 24x our '22 estimate. Risks are mainly COVID's effect on sports and competition, while valuation will be a debate for profit-focused investors, less so for growth-oriented investors."

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 $55.74 yesterday.



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