Draftkings Stock Hits Fresh High on Analyst Praise

The security has added over 517% year-over-year

Digital Content Manager
Mar 22, 2021 at 11:12 AM
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The shares of Draftkings Inc (NASDAQ:DKNG) are down 1.6% at $70.84 at last check, but earlier hit a record high of $74.38, after Loop Capital reiterated its view of the equity as a "top pick." The brokerage firm noted New York could soon legalize gambling, which would present a huge opportunity for the company, as the market  for online sports betting becomes crowded in New Jersey. Plus, Draftkings has already secured access rights through a partnership with del Lago Resort & Casino. 

The security has been climbing up the charts since early November, when shares fell to the $35 level. The 60-day moving average has served as support for the past several months, too, containing at least three of the equity's pullbacks since the start of 2021. Year-over-year, Draftkings stock sports an astounding 517.8% lead. 

Analysts are optimistic towards the security, with 14 of the 21 in question carrying a "buy" or better rating, while seven call it a tepid "hold" or worse. Plus, the 12-month consensus target price of $73.09 is a 3.2% premium to the stock's current perch. 

A shift in the options pits may keep the wind at the equity's back. This is per DKNG's Schaeffer's put/call open interest ratio (SOIR), which stands in the 89th percentile of the past 12 months. In other words, short-term traders have rarely been more put-biased.  

What's more, DKNG options can be had for a discount at the moment. The security's Schaeffer's Volatility Index (SVI) of 64% sits higher than just 2% of readings from the past year. This suggests options players are pricing in relatively low volatility expectations right now.

Lastly, Draftkings stock's Schaeffer's Volatility Scorecard (SVS) sits at an elevated 97 out of 100, indicating the equity has exceeded volatility expectations during the past year -- a boon for buyers. 

 

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