DraftKings shares had been shrugging off the corporate’s newest earnings report, however bulls discovered loads of causes to cheer.
As MoffettNathanson’s Robert Fishman put it, “it is not really an exaggeration to say almost everything went right for DraftKings” in 2023, and the most important stumbling block for the corporate was probably adversarial outcomes for some sporting occasions.
Those destructive occasion outcomes helped drive the corporate to a shock loss within the newest quarter. Prior to that, DraftKings
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had overwhelmed bottom-line expectations for eight quarters in a row.
But “when CEO Jason Robins lays out in DraftKings’ shareholder letter that 2024 ‘will simply be more of the same,’ we think there are still many ways the company can build upon last year’s momentum and keep winning going forward,” Fishman wrote as he reiterated a purchase ranking and $52 goal value for the inventory.
DraftKings’ inventory was close to flat in Friday afternoon buying and selling following the report a day earlier, however the inventory surged 209% in 2023 and was up 26% on a year-to-date foundation for 2024.
“Our view is that [DraftKings’] specific positioning in this burgeoning market remains secure as product improvements continue to drive further top-line and bottom-line growth,” Jefferies analyst David Katz mentioned in a be aware to purchasers.
Katz flagged the corporate’s roughly $750 million deal for Jackpocket, an online-lottery firm. He thought the deal may assist the corporate choose up new clients and located it to be “strategically sound.”
“It has been our expectation that [DraftKings] would begin generating [free cash flow] in 2024, which would be deployed for product enhancement and growth, which this deal could satisfy, post what we assume is modest dilution in the near term,” he wrote.
He known as out that “growth into markets where [online sports betting] and iGaming are not yet legal, but lotteries are, provides efficient acquisition of customers for future engagement.”
Katz has a purchase ranking and $46 goal value on DraftKings shares.
Piper Sandler’s Matt Farrell added that “unfavorable sports outcomes” overshadowed the fourth quarter, however he nonetheless noticed a vivid image forward, particularly on condition that the corporate “has now clearly established a cadence of increasing its full-year outlook as we move throughout the year.”
The newest numbers confirmed that “core dynamics continue to improve, with acquisition/retention/engagement and structural hold rates trending higher,” in his view. Hold charges symbolize the portion of betting cash that the corporate retains.
“From our perspective, it doesn’t appear any of the tailwinds are likely to slow down, and with a nice legislative backlog, we see the efficient playbook continuing for the quarters to come,” Farrell continued, whereas sticking with an obese ranking and a $50 goal value.
Source web site: www.marketwatch.com
