Analyst Bernie McTernan from Needham maintained a Buy rating on DraftKings and keeping the price target at $52.00.
Claim 70% Off TipRanks This Holiday Season
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
Bernie McTernan has given his Buy rating due to a combination of factors tied to DraftKings’ early execution in prediction markets and its strategic positioning versus peers. He notes that the new DraftKings Predictions app is intentionally designed to mirror a traditional sportsbook interface, which should lower friction for existing users and enhance monetization of the company’s large OSB customer base. While the initial market offering is narrow, focused mainly on moneyline and spread bets, he views this as a starting point with meaningful room for product expansion over time into more sophisticated bet types. McTernan also highlights that the introductory promotion is modest relative to typical online sports betting incentives, suggesting that customer acquisition in prediction markets may be less costly and competitive intensity lower than in regulated sports betting.
In addition, McTernan emphasizes the breadth of DraftKings’ initial geographic reach, with the prediction market product live in 38 states, significantly outpacing a key competitor’s footprint and underscoring a first-mover advantage in many jurisdictions. He acknowledges that fees on the platform are higher than at certain niche competitors, but sees pricing as comparable to other major entrants and believes DraftKings’ brand, liquidity, and user experience can offset this. The company’s move into prediction markets also adds a new adjacent revenue stream that leverages its existing technology and customer ecosystem, diversifying growth drivers beyond traditional OSB and iGaming. Taken together, these factors support his positive outlook on DraftKings’ ability to capture incremental volume in a new category and justify maintaining a Buy rating on the stock.
In another report released yesterday, Jefferies also reiterated a Buy rating on the stock with a $0.00 price target.