The stock is down in part because growth stocks are falling as interest rates rise, but investors also haven't been pleased with DraftKings' very aggressive acquisition strategy. An offer to Entain (LSE: ENT) for $22 billion, more than DraftKings' valuation today, has caused the latest consternation for investors.
Why is DraftKings stock down 51% year to date?
The stock is down 51% year to date, along with the broader market sell-off this year. NFTs are part of DraftKings' monetization strategy to attract more users to the platform and get them to spend additional money over time.
Does DraftKings have a lower target enterprise value?
In his new research note on the company, Bazinet wrote that his modification is based on a slight decline in DraftKings' active accounts, and a lower target enterprise value per account. The analyst is basing his take on the company's recently announced first-quarter results.
What's going on with DraftKings' NFTS?
NFTs are part of DraftKings' monetization strategy to attract more users to the platform and get them to spend additional money over time. Other than the partnership news with the UFC, one factor that might be contributing to the stock's positive return this week is valuation.
Is Bazinet still bullish on DraftKings shares?
It's revealing that, despite his price target cut, Bazinet is still rather bullish on DraftKings shares.
Is DraftKings a good stock to invest?
' That's Why It's a Buy, Analyst Says. As online sports betting continues to gain traction in new state markets, it may be time to revisit DraftKings, said Jefferies analyst David Katz.
Is DraftKings a good long term stock?
DraftKings stock is a promising long-term prospect in the sports-betting industry, and the company's potential is encouraging. Despite a lack of earnings, the company has strong revenue growth and is one of the leaders in the online betting megatrend.
Is DraftKings losing money?
DraftKings lost $326 million in the fourth quarter, and had fewer users than expected. The loss came despite healthy growth in the top line in the last three months of 2021, with sales rising 47 percent to $473 million. The Super Bowl ad blitz is expected to further bolster legalized sports betting.
What will DraftKings stock be worth?
Stock Quote (U.S.: Nasdaq) | MarketWatch....$ 11.38.CloseChgChg %$11.420.706.53%
Will Draftking stock recover?
The 27 analysts offering 12-month price forecasts for DraftKings Inc have a median target of 25.00, with a high estimate of 60.00 and a low estimate of 13.00. The median estimate represents a +69.61% increase from the last price of 14.74.
Is DraftKings stock gonna go up?
He predicted that revenue could grow by 63% in 2022, and by 38% annually through 2025. Despite the months-long selloff, analysts are cautiously optimistic about the stock. Of the 32 analysts covering the shares, 19 rated them a Buy or Overweight, 12 rated them a Hold, and one has a Sell rating.
Can DraftKings go out of business?
Though more than 30 states have legalized sports wagering, you likely won't be able to bet on your phones in California until 2023 at the earliest, and the return of mobile betting in Florida is uncertain.
What is Draftkings trying to do?
On the acquisition side, DraftKings is trying to scoop up competitors to build a large market share, hoping that will lead to economies of scale long-term. If it can't use stock to acquire companies, scale will be harder to build.
Why is Draftkings important?
Investor confidence in a company like DraftKings is key for the company long-term, because it allows management to grow and acquire competitors without having to worry about being profitable or cash-flow positive. The stock can be a piggy bank to be used when needed.
What happens if you lose confidence in Draftkings?
If investors lose confidence in DraftKings and the stock falls, it can be a downward spiral. Suddenly the cash burn is more important, and management may pull back on growth spending, which leads to slower revenue growth, which hurts confidence even more.
Is Draftkings cash running out?
DraftKings had $1.7 billion of net cash on the balance sheet at the end of the second quarter, so cash isn't running out soon -- but at the current burn rate, the company only has a few years of cash to fund its growth.
Does Draftkings burn cash?
As DraftKings burns cash, a lower stock price could also lead to dilution if management needs to raise cash from shareholders.
DKNG Stock Is Hitting Bottom
If you bought today and the current analyst median target price comes to fruition by the end of 2022, investors are looking at almost 89% upside. That’s a pretty healthy one-year return.
The Bottom Line
I believe DraftKings has a strong brand. The addition of Golden Nugget Online Gaming will undoubtedly help bring some balance to a business driven primarily by sports betting. Using stock to buy GNOG, I think GNOG investors will be happy long-term with the decision to sell to DraftKings.
