{"id":299492,"date":"2023-11-17T15:55:26","date_gmt":"2023-11-17T21:55:26","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=299492"},"modified":"2023-11-17T16:49:46","modified_gmt":"2023-11-17T22:49:46","slug":"draftkings-deserve-some-caution-following-torrid-run","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/draftkings-deserve-some-caution-following-torrid-run\/","title":{"rendered":"DraftKings Merits Caution, Says Research Firm"},"content":{"rendered":"

Following another impressive run this week, shares of DraftKings (NASDAQ: DKNG) are higher by 38.31% over the past month and have surged 236.60% year-to-date, but some analysts believe some caution should be applied to the high-flying gaming company.<\/p>\n

\"DraftKings
Inside a DraftKings office. A research firm says some caution is warranted with the high-flying gaming company. (Image: Wall Street Journal<\/em>)<\/figcaption><\/figure>\n

This month, the online sportsbook operator wowed the investment community<\/a> with elevated 2023 and 2024 earnings before interest, taxes, depreciation, amortization (EBITDA) and revenue guidance while delivering more of the same for 2025 and beyond at its investor day<\/a> earlier this week. Some market observers believe DraftKings\u2019 strong third-quarter results were the byproduct of an unusually soft competitive landscape.<\/p>\n

Most salient was the unusually soft competitive landscape in the July-September period where DKNG\u2019s market share surged,\u201d observed Eilers & Krejeck Gaming (EKG). \u201cBarstool was in limbo, BetMGM was light on spending and by its own admission, running out a sub-par sport betting product. Caesars was also cutting spending and Fanatics was just finding its feet.\u201d<\/p><\/blockquote>\n

Emerging competitive threats to established online sports betting (OSB) operators such as DraftKings include Bet365, Penn Entertainment\u2019s (NASDAQ: PENN) newly launched ESPN Bet, and Fanatics.<\/p>\n

DraftKings Ready for Elevated Competition<\/h2>\n

DraftKings has acknowledged new entrants to the sports betting space and says it\u2019s ready<\/a> for that competition.<\/p>\n

That operator and FanDuel are a duopoly in the US sports wagering industry, combining for over 70% market share. Data indicate DraftKings is also taking share. Conversely, the industry has claimed several smaller victims, with multiple operators departing or opting to sell themselves to larger rivals.<\/p>\n

Another point is that competition in the domestic sports wagering industry is evolving and could prove more credible regarding wrestling shares from DraftKings and FanDuel. Establish operators have learned lessons on the spending front, and new entrants have the capital to compete immediately.<\/strong><\/p>\n

\u201cCaesars throwing buckets of money at OSB in 3Q21-2Q22, a period when its product and operational execution were not close to market-leading). Indeed, this round will feature multiple brands (ESPN Bet, Fanatics, bet365) with scale ambitions, deep warchests, competitive products, and increasingly sophisticated ops games,\u201d added EKG.<\/p>\n

DraftKings Fundamentals Are Strong<\/h2>\n

While DraftKings stock has delivered a scintillating performance this year, new rivals should not be ignored, nor should the operator\u2019s sturdy fundamental outlook. That includes expectations that the company should have more than $1.2 billion in cash on hand by the end of this year. Additionally, the time it takes a DraftKings customer to become profitable for the company is decreasing.<\/p>\n

DraftKings said its 2023 customer cohort will pay back its acquisition costs in 2.3 years, as opposed to nearly 3 years for 2021 customers. The trend is driven by improved bet mix (more parlays!) and marketing efficiencies,” <\/strong>EKG concluded.<\/p><\/blockquote>\n

Those factors and others are likely why at least five sell-side analysts boosted their price targets on DraftKings<\/a> this week.<\/p>\n","protected":false},"excerpt":{"rendered":"

Following another impressive run this week, shares of DraftKings (NASDAQ: DKNG) are higher by 38.31% over the past month and have surged 236.60% year-to-date, but some analysts believe some caution should be applied to the high-flying gaming company. This month, the online sportsbook operator wowed the investment community with elevated 2023 and 2024 earnings before […]<\/p>\n","protected":false},"author":46,"featured_media":244408,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,1074],"tags":[81903,80968],"acf":[],"yoast_head":"\nDraftKings Deserve Some Caution Following Torrid Run<\/title>\n<meta name=\"description\" content=\"DraftKings is on torrid pace, but caution warranted, says research firm.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/draftkings-deserve-some-caution-following-torrid-run\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"DraftKings Deserve Some Caution Following Torrid Run\" \/>\n<meta property=\"og:description\" content=\"DraftKings is on torrid pace, but caution warranted, says research firm.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/draftkings-deserve-some-caution-following-torrid-run\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2023-11-17T21:55:26+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-17T22:49:46+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/DKNG-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"960\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-deserve-some-caution-following-torrid-run\/\",\"url\":\"https:\/\/www.casino.org\/news\/draftkings-deserve-some-caution-following-torrid-run\/\",\"name\":\"DraftKings Deserve Some Caution Following Torrid Run\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-deserve-some-caution-following-torrid-run\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-deserve-some-caution-following-torrid-run\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/DKNG-1.jpg\",\"datePublished\":\"2023-11-17T21:55:26+00:00\",\"dateModified\":\"2023-11-17T22:49:46+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"DraftKings is on torrid pace, but caution warranted, says research firm.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-deserve-some-caution-following-torrid-run\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/draftkings-deserve-some-caution-following-torrid-run\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-deserve-some-caution-following-torrid-run\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/DKNG-1.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/11\/DKNG-1.jpg\",\"width\":1280,\"height\":960,\"caption\":\"Inside a DraftKings office. 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