Bulls Bet on DraftKings Stock After Earnings

Sports gambling stock DraftKings Inc (NASDAQ:DKNG) is 17.4% higher at $25.02 at last check, and hit a one-year high of $25.30 earlier after reporting better-than-expected results for the first quarter. Specifically, DraftKings turned in losses of 51 cents per share on revenue of $769.65, and raised its full-year forecast.

The results emboldened analysts, with no fewer than four price-target hikes rolling in. Craig-Hallum seems to be the most optimistic of the bunch, raising its price objective to $32 from $27. There's room for upgrades, too, as eight of 24 covering brokerages rate DKNG a "hold" or worse.

Today's options pits are rife with bullish activity. At last check, 85,000 calls and 35,000 puts have crossed the tape, or seven times the intraday average amount. Most popular is the weekly 5/5 24.50-strike call, while new positions are being opened at the 25-strike call in that series.

This denotes a shift in options traders' sentiment. In fact, at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), DraftKings stock sports a 50-day put/call volume ratio that stands higher than 94% of annual readings.

Plus, DKNG's Schaeffer's put/call open interest ratio (SOIR) of 0.92 sits in the 71st percentile of the past year, suggesting short-term options traders have targeted puts over calls at a higher-than-usual clip.

Thanks to a floor at the $17 area, and an early April bounce off its 60-day moving average, DKNG is more than 121% higher in 2023. Year-over-year, the stock boasts a 74.2% lead.