Analyst: DraftKings' Leadership Position is Secure

DKNG hit a multi-year high after earnings last Friday, but has cooled off since

Deputy Editor
Feb 23, 2024 at 9:21 AM
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DraftKings Inc (NASDAQ:DKNG) stock is pointed 3% higher in premarket trading this morning after Barclays upgraded the sports betting stock to "overweight" from "equal weight" and hiked its price target to $50 from $41. The analyst sees DraftKings' leadership position in the growing sports gambling market as secure.

This isn't the only analyst action DKNG has seen recently. Late last week, as part of the company's upbeat earnings report, DraftKings agreed to acquire Jackpocket for $750 million, which led to no less than 18 price-target hikes. There's still some short squeeze potential, too. Despite short interest falling 34.1% in the last month; a healthy 4.5% of the equity's total available float is still sold short.

DraftKings stock is on track to pad its 109% year-over-year lead and 16% year-to-date gain, handily outperforming the SPDR S&P 500 ETF Trust's (SPY) 6.8% return in 2024. The shares hit a multi-year high of $45.62 after earnings on Friday, but have shed 8.4% since. Today's premarket gains have DKNG poised to jump back above recent short-term support at its 10-day moving average.

For those looking to speculate, options are reasonably priced at the moment in a post-earnings volatility crunch. The stock's Schaeffer's Volatility Index (SVI) of 43% ranks in the low 13th percentile of its annual range, meaning options traders are pricing in low volatility expectations. 

 

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