Draftkings Beats Expectations with Q1 Earnings, Analyst Raises Price Target

BTIG's Clark Lampen raised their price target on Draftkings (NASDAQ: DKNG) by 1.9% from $53 to $54 on 2024/05/06. The analyst maintained their Strong Buy rating on the stock.

Lampen's decision to raise the price target comes on the heels of Draftkings' impressive Q1 2024 earnings report. The company reported earnings per share (EPS) of $0.03, beating the Zacks Consensus Estimate of $(0.28) and Q1 2023's $(0.51). Additionally, Draftkings reported revenue of $1.18 billion, surpassing the Zacks Consensus Estimate by 4.40% and Q1 2023's $769.65 million.

During the company's conference call, CEO Jason Robins highlighted several positive takeaways, including the improvement in marketing efficiency, rising per cap spending, and the industry's potential for unit economic upside. These factors contribute to Lampen's bullish outlook on Draftkings' future prospects.

Draftkings' management also provided encouraging guidance for FY 2024. They anticipate revenue in the range of $4.8 billion to $5.0 billion, up from their previous guidance of $4.65 billion to $4.90 billion. Additionally, they expect EBITDA of $460 million to $540 million, an increase from the previous guidance of $410 million to $510 million.

Lampen's optimism is shared by other analysts who have updated their ratings on DKNG. Deutsche Bank's Carlo Santarelli raised their price target by 2.9% to $35, while Stifel Nicolaus's Jeffrey Stantial increased their price target by 2% to $51. Barclays's Brandt Montour also raised their price target by 3.8% to $54. All three analysts maintained their respective ratings of Hold, Strong Buy, and Strong Buy on the stock.

According to data from WallStreetZen, 93.8% of top-rated analysts currently rate DKNG as a Strong Buy or Buy, with only 6.3% considering it a Hold. None of the analysts recommend or strongly recommend selling the stock.

Since the release of Draftkings' Q1 2024 earnings report on May 2, the stock price has increased by 2.4%. Year-over-year, DKNG has seen a significant surge of 82.3%. These figures indicate that the stock has outperformed the broader market, with the S&P 500 only increasing by 25.2% during the same period.

It's worth noting that Clark Lampen, the BTIG analyst who raised the price target, is ranked in the top 10% of Wall Street analysts by WallStreetZen. With an average return of 18.8% and a win rate of 60%, Lampen specializes in the Technology, Consumer Cyclical, and Communication Services sectors.

Draftkings Inc. operates as a digital sports entertainment and gaming company. Its services include multi-channel sports betting and gaming technologies, providing sports and gaming entertainment for operators in 17 countries. The company operates iGaming through its DraftKings brand in five states and also owns Golden Nugget Online Gaming, offering iGaming products and gaming brands in three states. In addition, Draftkings' Sportsbook is live with mobile and/or retail betting operations in the United States, complying with regulations in 18 states. The company's daily fantasy sports product is available in six countries internationally, covering 15 distinct sports categories. Draftkings also owns Vegas Sports Information Network (VSiN), a multi-platform broadcast and content company. Founded in 2011, Draftkings Inc. is headquartered in Boston, Massachusetts.

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WallStreetZen and Don Francis do not hold any positions in the companies mentioned in this article. The information and statistics provided herein are presented for general informational purposes only and may not be accurate, complete, or up-to-date. It should not be interpreted as a recommendation to buy or sell any stocks and should not be solely relied upon for making investment decisions. It does not take into account your financial situation or risk profile. All investors should conduct their own investment due diligence before buying a stock. WallStreetZen expressly disclaims any liability for the accuracy, reliability, or completeness of the analysts' information, price targets, ratings, or opinions.