DraftKings (NASDAQ:DKNG) Stock Price Up 5.6% – Still a Buy?

DraftKings Inc. (NASDAQ:DKNG)’s stock price shot up 5.6% on Friday . The stock traded as high as $25.67 and last traded at $25.58. Approximately 5,191,186 shares were traded during mid-day trading, a decline of 61% from the average session volume of 13,474,458 shares. The stock had previously closed at $24.22.

Key Stories Impacting DraftKings

Here are the key news stories impacting DraftKings this week:

• Positive Sentiment: A Ninth Circuit appeals court ruled that sports bets are not swaps, reducing the risk that DraftKings’ wagers could face additional derivatives regulation. The decision also supports industry-wide regulatory clarity and helped drive a broader rally in DraftKings and Flutter Entertainment. DKNG and FLUT Rally on Sports-Bets Ruling
• Positive Sentiment: An analyst comparison argued that DraftKings has stronger growth prospects than Flutter, citing sportsbook gains, improved customer economics and expansion of its Predictions product. DraftKings vs. Flutter Growth Prospects
• Positive Sentiment: DraftKings’ Predictions platform is receiving additional promotional exposure through a bonus offer tied to a Commanders-Ravens prediction market, potentially supporting customer engagement and product adoption. DraftKings Predictions Promotion
• Positive Sentiment: Investors purchased approximately 82,021 DKNG call options, about 106% above average call volume. While options activity does not guarantee further gains, it signals increased speculative interest in the shares.
• Neutral Sentiment: DraftKings introduced a system allowing loyalty points to be spent more like cash, which could simplify rewards for customers and encourage additional activity. DraftKings Loyalty Points Update
• Negative Sentiment: Investors continue to weigh governance concerns surrounding approval of a $30 million marketing contract for a cofounder’s startup shortly before his departure, raising questions about conflicts of interest and board oversight. DraftKings Cofounder Deal
• Negative Sentiment: Recent refinancing improved DraftKings’ liquidity through a $700 million term loan and a $750 million revolving facility, but the added debt keeps valuation, leverage and future interest costs in focus. DraftKings Refinancing and Valuation

Wall Street Analysts Forecast Growth

DKNG has been the topic of several recent research reports. Truist Financial set a $29.00 price objective on shares of DraftKings in a report on Monday, August 10th. UBS Group raised their target price on shares of DraftKings from $43.00 to $49.00 and gave the stock a “buy” rating in a report on Friday, June 5th. Guggenheim lowered their price target on shares of DraftKings from $35.00 to $33.00 and set a “buy” rating on the stock in a report on Monday, August 10th. Needham & Company LLC reaffirmed a “buy” rating and issued a $35.00 price target on shares of DraftKings in a report on Monday, May 11th. Finally, Benchmark increased their price target on DraftKings from $29.00 to $30.00 and gave the stock a “buy” rating in a research report on Friday, August 7th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-nine have issued a Buy rating, eight have assigned a Hold rating and two have issued a Sell rating to the company’s stock. Based on data from MarketBeat, the company has an average rating of “Moderate Buy” and a consensus target price of $34.11.

DraftKings Stock Performance

The company has a market cap of $12.54 billion, a PE ratio of -66.47 and a beta of 1.66. The firm’s fifty day moving average is $24.87 and its 200 day moving average is $24.54. The company has a current ratio of 1.02, a quick ratio of 1.02 and a debt-to-equity ratio of 3.22.

DraftKings (NASDAQ:DKNG) last posted its quarterly earnings data on Friday, August 7th. The company reported $0.09 earnings per share for the quarter, topping analysts’ consensus estimates of $0.02 by $0.07. The company had revenue of $1.44 billion during the quarter, compared to analysts’ expectations of $1.51 billion. DraftKings had a negative net margin of 2.68% and a negative return on equity of 11.26%. The firm’s revenue for the quarter was down 4.6% on a year-over-year basis. During the same period in the prior year, the business posted $0.30 earnings per share. As a group, research analysts predict that DraftKings Inc. will post 0.51 EPS for the current fiscal year.

Insider Activity

In related news, insider R Stanton Dodge sold 62,500 shares of the firm’s stock in a transaction dated Thursday, June 11th. The shares were sold at an average price of $29.68, for a total value of $1,855,000.00. Following the transaction, the insider directly owned 556,258 shares of the company’s stock, valued at approximately $16,509,737.44. This trade represents a 10.10% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Jocelyn Moore sold 10,759 shares of DraftKings stock in a transaction dated Wednesday, August 19th. The stock was sold at an average price of $24.05, for a total value of $258,753.95. Following the completion of the sale, the director owned 1,881 shares in the company, valued at approximately $45,238.05. The trade was a 85.12% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 47.18% of the stock is owned by corporate insiders.

Institutional Trading of DraftKings

Institutional investors have recently made changes to their positions in the company. Ascentis Independent Advisors purchased a new position in DraftKings in the 1st quarter valued at $27,000. Basecamp Wealth Advisors LLC grew its holdings in shares of DraftKings by 3,547.1% during the first quarter. Basecamp Wealth Advisors LLC now owns 1,240 shares of the company’s stock worth $27,000 after buying an additional 1,206 shares in the last quarter. CoreCap Advisors LLC grew its holdings in shares of DraftKings by 336.5% during the second quarter. CoreCap Advisors LLC now owns 1,148 shares of the company’s stock worth $29,000 after buying an additional 885 shares in the last quarter. Montag A & Associates Inc. raised its holdings in DraftKings by 82.5% in the 4th quarter. Montag A & Associates Inc. now owns 1,106 shares of the company’s stock valued at $38,000 after acquiring an additional 500 shares during the last quarter. Finally, SHP Wealth Management purchased a new position in DraftKings in the 4th quarter worth approximately $42,000. 37.70% of the stock is owned by institutional investors and hedge funds.

About DraftKings

DraftKings Inc is a leading digital sports entertainment and gaming company specializing in daily fantasy sports, sports betting and iGaming products. The company provides an integrated platform where users can participate in daily fantasy contests, place wagers on professional sports events, and enjoy a range of online casino-style games. DraftKings’ proprietary technology supports real-time odds, live scoring and advanced analytics to enhance the user experience across mobile and desktop applications.

Founded in 2012 by co-founders Jason Robins, Matthew Kalish and Paul Liberman, DraftKings began as a daily fantasy sports provider and rapidly expanded into regulated sports betting following legislative changes in the United States.