Shares of DraftKings (DKNG) are up in today’s trading after the sports betting company received a new Buy rating from Freedom Capital Markets. Indeed, five-star analyst Nick McKay argues that prediction markets could become a meaningful long-term growth opportunity for the company. In his view, DraftKings’ large customer base gives it a strong starting point because many of its 10.5 million unique customers could naturally try prediction products once they are built into the company’s Super App.
Meet Samuel – Your Personal Investing Prophet
- Start a conversation with TipRanks’ trusted, data-backed investment intelligence
- Ask Samuel about stocks, your portfolio, or the market and get instant, personalized insights in seconds
McKay believes that the line between prediction markets and traditional sports betting could become harder to distinguish over time. As a result, predictions could allow DraftKings to expand sports-betting-style products into parts of the U.S. where traditional sports betting is still limited. He also said that concerns about prediction markets may be overdone, which makes the current risk/reward setup more attractive.
Therefore, the analyst set a 12-month price target of $30, based on an enterprise value-to-adjusted EBITDA multiple of about 11 times his Fiscal 2028 estimate. He sees that valuation as reasonable because he expects DraftKings’ profits to rise by roughly 50% by 2028 compared with the company’s implied core profitability level in Fiscal 2026.
Is DKNG Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DKNG stock based on 24 Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average DKNG price target of $34.89 per share implies 37.5% upside potential.
