Market Overview

Susquehanna Bullish On DraftKings, Says Sports Betting Will 'Snap Back'

Share:
Susquehanna Bullish On DraftKings, Says Sports Betting Will 'Snap Back'

Online gambling company DraftKings Inc (NASDAQ: DKNG) is the first pure-play online gambling company in the U.S. with the scale necessary to conquer the growing market, according to Susquehanna Financial Group.

The DraftKings Analyst

Joseph Stauff initiated coverage of DraftKings with a Positive rating and $33 price target.

The DraftKings Thesis

DraftKings is already a market leader in the U.S. sports betting market after seven years of operations, with 12 million registered users, of which 8% are active monthly and 36% are active during the year, Stauff said in a Thursday initiation note. (See his track record here.)

The company has a head start against new potential rivals, including regulatory familiarity in 43 states and expertise with a customer acquisition retention "engine," the analyst said. 

The long-term case for DraftKings is based on expectations for the U.S. online gambling market to grow from $2 billion today to a range of $20 billion to $40 billion in 10 years, he said.

This figure doesn't include the estimated illegal sports betting market of $13 billion, Stauff said. 

Over the near-term, the COVID-19 pandemic merely "temporarily deferred" demand for sports betting, and there should be a "snap back" ahead of a potential return of the MLB and Premier League seasons in June, the analyst said. 

The NFL Draft in late April prompted five times more wagers placed on a year-over-year basis, while a May 9 UFC fight was the most-bet MMA event even before the main card started, he said. 

DraftKings is modeled to report a net gaming revenue compounded annual growth rate of at least 80% from $110 million in 2019 to $676 million in 2022, according to Susquehanna. 

DKNG Price Action

Shares of DraftKings were trading 3.85% higher at $26.85 at the time of publication. 

Related Links:

Why DraftKings Stock Is Trading Higher Today

Analyst Likes DraftKings As Public Embraces Legal Sports Betting

Latest Ratings for DKNG

DateFirmActionFromTo
May 2020Goldman SachsInitiates Coverage OnNeutral
May 2020Craig-HallumReiteratesBuy
May 2020Morgan StanleyMaintainsOverweight

View More Analyst Ratings for DKNG
View the Latest Analyst Ratings

 

Related Articles (DKNG)

View Comments and Join the Discussion!

Posted-In: gambling Joseph StauffAnalyst Color Price Target Initiation Sports Analyst Ratings General Best of Benzinga

Latest Ratings

StockFirmActionPT
WORKPiper SandlerMaintains40.0
TDOCPiper SandlerMaintains220.0
SPWHPiper SandlerMaintains15.0
NTBPiper SandlerMaintains30.0
MDBPiper SandlerMaintains226.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com