He says DraftKings can garner \u201coutsized share of the rapidly growing” US sports betting and internet gaming market, given its existing Daily Fantasy Sports clientele of 4M and consumer preference for its app relative to competitors.\u201d<\/p>\n
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However, the analyst notes, it could take seven years for DraftKings to reach management’s goal of a multiple of 8x earnings before interest, taxes, depreciation and amortization (EBITDA), meaning near-term upside could be limited following the stock’s run since its IPO.<\/p>\n<\/div>\n
The analyst suggests investors wait for a pullback \u2013 something DraftKings hasn’t materially experienced since coming public. However, the stock could be in the midst of one now. After flirting with $32 on Monday, it trades around $29.50 at this writing Tuesday.<\/p>\n
Checking The Comps<\/h2>\n
Based on a market value of $9.9 billion, Wall Street is treating DraftKings like a high-growth internet or software stock, not a traditional gaming equity, according to Barron’s.<\/i><\/p>\n
Some analysts believe that although those comparisons place lofty multiples on the sportsbook operator, they are nonetheless relevant, and that the investment community will continue viewing DraftKings as more of an internet\/technology company, not as an old guard casino operator<\/strong>.<\/p>\nDraftKings’ business is less capital intensive<\/a> than that of a brick-and-mortar gaming company, and analysts say that’s an appealing trait in today’s environment. Without major sports taking place, DraftKings is burning $15 million to $20 million a month, according to Barron’s.<\/i> But some operators of land-based casinos are burning millions of dollars per day while those venues are shuttered because of the COVID-19 pandemic.<\/p>\n","protected":false},"excerpt":{"rendered":"Something unusual is happening with DraftKings (NASDAQ:DKNG) stock Tuesday: a Wall Street bank is picking up coverage of the name, but isn’t waxing overtly bullish on the daily fantasy sports (DFS) giant. Earlier today, Stephen Grambling of Goldman Sachs started following DraftKings with a \u201cneutral\u201d rating \u2013 a tepid endorsement of the stock relative to […]<\/p>\n","protected":false},"author":46,"featured_media":136279,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,1074],"tags":[],"acf":[],"yoast_head":"\n
DraftKings Finally Got Tagged With a Tepid Analyst Rating<\/title>\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n\n\n\n\n\n\t\n\t\n\t\n