DraftKings: Accelerating Market Share and Revenue Growth in New York Justify Buy Rating

DraftKings, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Mike Hickey from Benchmark Co. maintained a Buy rating on the stock and has a $37.00 price target.

Mike Hickey has given his Buy rating due to a combination of factors that highlight DraftKings’ outperformance in a key growth market. In New York’s Week 16 online sports betting results, overall industry wagers and revenue grew at a healthy pace, but DraftKings expanded much faster than the market on both handle and revenue. Its significantly stronger revenue growth was supported by a higher win rate than a year ago, signaling not only improved operational efficiency and trading but also tangible market share gains relative to competitors.

Season-to-date data through Week 16 further reinforces this positive view, as New York continues to exhibit robust underlying growth while DraftKings stands out as the leading platform in both volume and revenue. The company’s wagers have been increasing at a faster clip than the broader market, and its revenue growth has been boosted by a sustained improvement in hold versus the prior year. When contrasted with a major rival that is growing handle more slowly and relying primarily on a higher hold for revenue gains, DraftKings appears to be combining share expansion with solid monetization. Taken together, these trends support Hickey’s conviction that DraftKings’ competitive position and financial trajectory justify a Buy rating on the stock.

In another report released on December 22, Truist Financial also maintained a Buy rating on the stock with a $43.00 price target.

Based on the recent corporate insider activity of 137 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of DKNG in relation to earlier this year.