DraftKings Price Soars! Here is what caused DKNG price to go up!

DraftKings (Ticker: DKNG) is attracting positive attention from Wall Street after management raised its outlook for the year, saying revenue could reach $1 billion.

Sports enthusiasts in lockdowns have pushed DraftKings and other online betting sites higher in the past year. Shares of the online gambling company jumped more than 10% on Monday to a new 52-week high. They are up 305% over one year compared with the S&P 500’s 24% one-year gain.

Goldman Sachs raised its price target on the stock to $73 from $71, confirming its Buy rating, saying the stock is driven by “the potential for accelerating adoption of sports betting.”

On Friday, the company said fourth-quarter sales reached $322 million, well above expectations for $233.2 million. DraftKing reported a quarterly net loss of $266.4 million, which was more than the expected loss of $196.6 million; more than half was related to stock-based compensation.

DraftKing shares have climbed more than 300% over the past year

Management said revenue could be between $900 million and $1 billion this year, up from an earlier forecast of between $750 million and $850 million, as the sports calendar returns to normal and more users adapt to sports betting and interactive gaming.

The number of “unique” players during the quarter rose 44% to 1.5 million.

Analysts raised their price targets after the report. In addition to Goldman, Morgan Stanley raised its target to $66, while Rosenblatt raised to $72, Truist to $65, and Credit Suisse to $84. The stock currently trades around $67.

Jefferies analyst David Katz, who rates the stock a Buy, raised his target to $73, saying he expects the company to turn a profit in 2023 especially given the unexpectedly strong forecast.

More states are allowing online sports betting. New York Gov. Andrew Cuomo has proposed it to help close a $15 billion budget gap. Illinois recently allowed it, and Maryland and Louisiana are also close, according to Katz. “We assume IL will extend mobile registration and MD and LA will go live before year-end,” he said in the note on Monday.

Last year, DraftKings was able to introduce mobile sports betting in Iowa, Colorado, Tennessee, and Virginia. It is live in 12 states with online sports betting. An additional 19 states are considering legislation to allow it.

Bank of America analyst Shaun Kelley raised the price target to $70, citing legislative momentum for online sports betting in the U.S. and a possible launch in Canada this year.

“We are increasingly confident in the topline trajectory for DKNG and the sector as a whole.”

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