DraftKings (NASDAQ:DKNG) Raised to Hold at Zacks Research

DraftKings (NASDAQ:DKNG) was upgraded by investment analysts at Zacks Research from a “strong sell” rating to a “hold” rating in a report issued on Wednesday, Zacks reports.

Other research analysts also recently issued reports about the company. Wells Fargo & Company downgraded DraftKings from an “overweight” rating to an “equal weight” rating and dropped their target price for the stock from $30.00 to $21.00 in a research note on Monday. Canaccord Genuity Group decreased their price target on DraftKings from $40.00 to $30.00 and set a “buy” rating for the company in a research note on Monday. Citizens Jmp lowered their price target on DraftKings from $37.00 to $35.00 and set a “market outperform” rating for the company in a report on Thursday, September 24th. Barclays dropped their price target on DraftKings from $34.00 to $27.00 and set an “overweight” rating on the stock in a research note on Monday. Finally, Stifel Nicolaus downgraded shares of DraftKings from a “buy” rating to a “hold” rating and cut their price objective for the company from $32.00 to $21.00 in a report on Monday. One research analyst has rated the stock with a Strong Buy rating, twenty-five have assigned a Buy rating, eleven have given a Hold rating and two have given a Sell rating to the stock. According to MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and a consensus target price of $27.61.

DraftKings Price Performance

NASDAQ:DKNG opened at $19.12 on Wednesday. DraftKings has a 1-year low of $16.55 and a 1-year high of $36.98. The company has a 50-day moving average of $21.10 and a 200 day moving average of $23.82. The company has a quick ratio of 1.02, a current ratio of 0.99 and a debt-to-equity ratio of 12.21.

DraftKings (NASDAQ:DKNG) last announced its earnings results on Thursday, November 5th. The company reported ($0.53) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.41) by ($0.12). DraftKings had a negative net margin of 5.91% and a negative return on equity of 43.92%. The company had revenue of $1.33 billion for the quarter, compared to the consensus estimate of $1.39 billion. During the same period last year, the business posted ($0.26) EPS. The firm’s revenue was up 16.2% compared to the same quarter last year. Research analysts anticipate that DraftKings will post 0.31 EPS for the current fiscal year.

Insiders Place Their Bets

In other DraftKings news, Director Gregory Wendt bought 5,000 shares of DraftKings stock in a transaction dated Wednesday, November 11th. The stock was acquired at an average cost of $19.76 per share, with a total value of $98,800.00. Following the purchase, the director directly owned 22,920 shares in the company, valued at $452,899.20. This represents a 27.90% increase in their position. The acquisition was disclosed in a filing with the SEC, which is available through the SEC website. Also, CFO Alan Ellingson acquired 18,908 shares of the firm’s stock in a transaction on Monday, November 9th. The shares were bought at an average cost of $18.51 per share, for a total transaction of $349,987.08. Following the completion of the acquisition, the chief financial officer owned 214,692 shares of the company’s stock, valued at approximately $3,973,948.92. This represents a 9.66% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. Insiders own 47.18% of the company’s stock.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in DKNG. Renaissance Technologies LLC acquired a new stake in shares of DraftKings in the first quarter valued at about $17,660,000. Spruce House Investment Management LLC boosted its position in DraftKings by 129.6% during the first quarter. Spruce House Investment Management LLC now owns 9,650,000 shares of the company’s stock worth $208,633,000 after acquiring an additional 5,446,166 shares during the last quarter. Janus Henderson Group PLC boosted its position in DraftKings by 9.3% during the first quarter. Janus Henderson Group PLC now owns 27,665,699 shares of the company’s stock worth $588,288,000 after acquiring an additional 2,351,790 shares during the last quarter. Edgestream Partners L.P. acquired a new position in DraftKings during the first quarter worth about $4,473,000. Finally, Entropy Technologies LP purchased a new stake in DraftKings during the 1st quarter valued at about $2,669,000. Hedge funds and other institutional investors own 37.70% of the company’s stock.

Key Headlines Impacting DraftKings

These are some of the DKNG headlines that stood out recently:

• Positive Sentiment: DraftKings is targeting roughly $650 million to $750 million in Predictions revenue in 2027, citing customer engagement and retention. A report also says the exchange’s revenue margins are approaching sportsbook levels, which could strengthen the business case if the projections are achieved. Predictions revenue target
• Negative Sentiment: Wells Fargo downgraded DraftKings, and several other firms reportedly cut ratings or price targets. The repeated analyst caution adds pressure to expectations for the shares. Wells Fargo downgrade
• Negative Sentiment: Law firms announced investigations into potential securities claims, including whether DraftKings adequately disclosed the costs of expanding Predictions. These are allegations under investigation, not findings of wrongdoing, but they add legal and reputational risk. Investor investigation announcement

About DraftKings

DraftKings Inc. is a digital sports and entertainment company founded in 2012. It began as a daily fantasy sports platform and has since expanded into online sports betting and gaming. The company offers daily fantasy contests, a sportsbook and online casino products, including games such as slots and table games. Its services are available in a range of U.S. jurisdictions and in Ontario, Canada, where permitted by local regulations. DraftKings is headquartered in Boston, Massachusetts. Co-founder Jason Robins serves as the company’s chief executive officer.