On Tuesday, Benchmark affirmed its Buy rating on DraftKings Inc. (NASDAQ: NASDAQ:DKNG) stock, maintaining a $44.00 price target for the company's shares.
The firm's analysis highlighted DraftKings as a top idea for 2024, noting that despite a 2% year-to-date decline in share price, the company is poised for a robust performance through the end of the year.
Benchmark's commentary pointed out that while shares of competitor Flutter (LON:FLTRF) have risen by 17% year-to-date, DraftKings is projected to outpace Flutter with a 21% revenue growth in 2025 compared to Flutter's expected 12%.
Both companies are currently trading at 2.7 times their 2025 sales estimates. However, Benchmark believes DraftKings should command a premium due to its market leadership position and its status as a pure-play in the North American online market.
Several factors bolster the firm's positive outlook on DraftKings. These include stronger market win margins in the third quarter, growth in new user acquisition, effective tax mitigation strategies, and a valuation contraction that presents a compelling opportunity for investors, especially ahead of the NFL season.
DraftKings' strategic positioning and operational milestones are setting the stage for what Benchmark anticipates to be a strong close to the year. The company's focus on expanding its user base and capitalizing on favorable market conditions could potentially translate into significant gains for its shareholders.
InvestingPro Insights
As DraftKings Inc. (NASDAQ: DKNG) navigates through 2024, recent data from InvestingPro shines a light on some key financial metrics and analyst expectations that may interest investors. The company's market capitalization stands at a solid $16.71 billion, reflecting its significant presence in the market. Despite a negative price-to-earnings (P/E) ratio of -39.64, indicating that the company is not currently profitable, analysts are optimistic about its future. They expect net income to grow this year, supporting a positive outlook for the stock.
InvestingPro Tips suggest that DraftKings is anticipated to experience sales growth in the current year, a factor that could be driving the company's robust performance expectations. Additionally, the stock has demonstrated a significant return over the last week, with a 9.45% price total return. This suggests a short-term positive momentum that may catch the eye of investors looking for quick gains. However, it's important to note that the stock price movements are quite volatile, which could indicate a higher risk for potential investors.
For those considering an investment in DraftKings, additional insights are available. There are over 10 InvestingPro Tips on the platform that delve deeper into the company's financial health and market predictions, which can be found at https://www.investing.com/pro/DKNG. These tips could provide valuable guidance for making informed investment decisions.
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