DraftKings Shares Have Potential for Football Season, Market Share Gains
Posted: September 20, 2021, 7:21 a.m.
Last updated on: September 20, 2021, 7:21 a.m.
DraftKings (NASDAQ: DKNG) stock gets another endorsement today as Loop Capital says the name of the game remains a top pick thanks to the momentum created by the arrival of the football season and the increase in market share.
In a note to customers on Monday, the research firm reiterates a “buy” note and a price target of $ 105 on DraftKings. This is by far the highest price prediction on the stock on Wall Street and nearly 50% above the consensus estimate. It also implies an increase of almost 60% from the September 17 close.
DraftKings is gaining market share and recently overtook FanDuel as the best sports betting app in the US according to the latest Apple App Store rankings, ”Loop Capital said. “Recent market share gains are also supported by the latest monthly revenue / management data reported by various state gaming commissions, and our analysis suggests another ‘beat and rise’ quarter for our top pick. “
FanDuel, DraftKings and BetMGM are the top three operators in terms of national market share for online casinos and sports betting.
Theft of significant market share for DraftKings Stock
The ability of DraftKings and, for that matter, any other competitor in this space to steal market share from FanDuel is critical.
According to some estimates, FanDuel, a unit of Flutter Entertainment (OTC: PDYPY), controlled 45% of the US online sports betting market at the end of the second quarter. Additionally, BetMGM holds the # 1 spot in the booming online casino market, another area in which DraftKings competes. However, the Boston-based company is up to the challenges.
Some analysts see DraftKings winning nearly a quarter of the iGaming and sports betting markets by 2025. Citing cross-selling opportunities, including its burgeoning media footprint, DraftKings may gain market share from FanDuel , according to some Wall Street analysts.
As for Loop Capital’s prediction that DraftKings will beat and raise its quarterly forecast, that’s not an exaggerated bet as the company has already raised its revenue outlook several times this year. After releasing its second-quarter financial results in August, the games company raised its annual sales forecast by $ 1.21 billion to $ 1.29 billion, from $ 1.05 billion to $ 1.15. billion dollars in May.
The dynamics of football are palpable
Football is the most betting on sport in the United States and there is significant momentum for operators on this front as the number of states offering regulated sports betting is much higher today than it is. was a year ago. Today, 26 states and Washington, DC are in the real and legal camp and Connecticut and others may join before the current football campaign ends.
The data confirms that football is very important to betting operators. Sports generate around 35-40% of annual sports betting revenue, with one-third of those annual sales occurring in the fourth quarter.
DraftKings offers mobile sports betting in 13 states and retail betting only in Mississippi and New York. These numbers could increase in the coming months.