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.
Will DraftKings' stock price keep dropping?
My view is that DraftKings' stock price will keep dropping. This is because the factors that led to DKNG's shares falling year-to-date in 2022 could still exert downward pressure on the stock in the near future.
How did DraftKings' Q1 2022 results impact its gross profit margin?
At the company's Q1 2022 results call, DraftKings explained that its Q1 2022 gross profit margin "was heavily impacted by the launch of New York, which had negative gross margin in the quarter due to Q1 being its launch quarter."
Is DraftKings a buy Under $20?
Thanks to a terrible first month of 2022 — 374 S&P 500 stocks are down year-to-date through Jan. 21 — DraftKings now trades under $20 for the first time since April 2020. Investors who bought DKNG at the end of December probably thought they were getting a pretty good deal at $27 and change.
Is DraftKings’ fair value above or undervalued?
The stock’s fair value will rise considerably if readers assume a positive EBITDA sooner than the fiscal year 2022. Conversely, DraftKings may post ongoing losses and a break-even quarter starting next year. That would validate Chanos’ short position because the stock trades well above its fair value.
Why is DraftKings stock down so much?
DraftKings stock has fallen 19.7% year-to-date, while the S&P 500 SPX –3.88% has dropped 8.1% over the same period. Its stock has fallen more than 60% since Labor Day as investors have weighed up increasingly intense competition in the sports betting sector and the company's heavy losses.
Is DraftKings stock a good buy?
' That's Why It's a Buy, Analyst Says. As online sports betting continues to gain traction in new state markets, it may be time to revisit DraftKings, said Jefferies analyst David Katz.
What will DraftKings stock be worth?
Stock Quote (U.S.: Nasdaq) | MarketWatch....$ 11.10.CloseChgChg %$11.03-2.07-15.80%
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.
Is DraftKings Buy Sell or Hold?
The DraftKings, Inc. stock holds sell signals from both short and long-term moving averages giving a more negative forecast for the stock. Also, there is a general sell signal from the relation between the two signals where the long-term average is above the short-term average.
Is DKNG overvalued?
The shares don't allow for meaningful voting rights, and there's heavy competition in a limited niche. A discounted cash flow forecast places the intrinsic value of the company's shares at $51 per share. Above that level the company is theoretically overvalued.
How big will DraftKings get?
DraftKings stock has lost around 65% over the last 12 months, dropping 30% this year alone amid a wider market selloff. But Allen said the drop has gone too far, even though the company has yet to turn a profit. He predicted that revenue could grow by 63% in 2022, and by 38% annually through 2025.
Will DKNG be acquired?
DraftKings DKNG, +12.08% has completed its purchase of Golden Nugget Online Gaming in the company's latest move to boost revenue and lower costs. The acquisition was an all-stock deal worth roughly $450 million, a company spokesperson informed MarketWatch.
Can DraftKings be profitable?
Despite a hefty 51% tax on online gross gaming revenue from mobile sports betting in New York, DraftKings still intends to turn a profit within a three-year period.
Who owns the most DraftKings stock?
The Vanguard Group, Inc.Top 10 Owners of DraftKings IncStockholderStakeShares ownedThe Vanguard Group, Inc.6.15%26,914,343ARK Investment Management LLC5.35%23,416,465Nikko Asset Management Co., Ltd.3.23%14,142,028Nikko Asset Management Americas, ...3.05%13,326,1476 more rows
Is DraftKings in debt?
Based on the latest financial disclosure, Draftkings has a Total Debt of 1.32 B. This is 65.78% lower than that of the Consumer Cyclical sector and 29.21% higher than that of the Gambling industry. The total debt for all United States stocks is 75.18% higher than that of the company.
A Closer Look at DKNG Stock
DraftKings just launched in New York State ahead of the hugely popular NFL playoffs.
Big Market
Despite its high cash burn and lack of profits, DraftKings is on the ground floor of what is expected to be a huge industry going forward.
Wait for DKNG Stock to Hit Bottom
There are no indications that DraftKings stock has hit bottom yet. With the share price continuing to slump lower and lower, now is not the time for investors to take a position in the online gambling stock.
Big Opportunity
DKNG shares recently bounced off their 52-week low of $17.42 after investment bank Morgan Stanley (NYSE: MS) upgraded the stock to “overweight” from “equal weight” previously and maintained a $31 price target.
Lack of Profits
While the market opportunity in front of Draftkings is huge, the company continues to be weighed down by a lack of profits. In its most recent quarterly print, Draftkings reported that its net loss widened to $545 million, which was 38% greater than the $395 million loss posted a year earlier. Draftkings next reports earnings is on Feb. 18.
The Bottom Line
There are certainly plenty of reasons to like Draftkings stock where it currently sits. At under $25 a share, the stock offers a great entry point for investors who have a long time horizon. However, the market remains volatile and Draftkings has been hit harder than most stocks in recent months. The worst may not be behind it.
Wood Increases Her Position
Cathie Wood, the renowned head of ARK Investments, has added to her company’s position on Dec. 20. She bought another 55,400 shares of DKNG stock for the ARK Fintech Innovation ETF (NYSEARCA: ARKF ). It was the first time in a month that Wood bought DraftKings shares.
DraftKings Stock at a Glance
As I mentioned, DraftKings is having a rough 2021. Over the last three months, DKNG stock is down more than 45%.
The Bottom Line on DKNG Stock
Third-quarter earnings for DraftKings offers some reason for optimism. The company reported revenue of $213 million, which was an increase of 60% from a year ago. DraftKings says it has 1.3 million monthly unique paying customers on its platform.
DKNG Stock Is Stalling
Investors are losing patience waiting for DraftKings to win approval for operating sportsbook operations. It began the process for getting Nevada gaming licenses back on March 11, 2020.
The Bearish Bet on DraftKings Grows
The short float on DKNG stock is around 10%. Famed short-seller Jim Chanos disclosed his bet against the company’s stock, and Chief Executive Officer Jason Robins questioned his concerns on valuations.
The Opportunity Outweighs Risks
The NFL post-season will have strong betting volumes compared to the regular season. Even though sports betting is legal for DraftKings in limited places, it should lift its results.
The Takeaway on DKNG Stock
The sports betting sector is deeply out of favor. Eventually, the negative sentiment will reverse. DraftKings needs to shrink its expenses in the quarters ahead.
