This is a sector leader and the stock has backed up nicely, offering a great entry level. DraftKings Inc. (NASDAQ: DKNG) operates as a digital sports entertainment and gaming company. It provides users with daily sports, sports betting and iGaming opportunities. It also is involved in the design and development of sports betting and casino gaming platform software for online and retail sportsbook and casino gaming products.
The company entered the market in April 2020 at a time when most companies were putting off their initial public offerings. The offering was not an IPO in the truest sense because DraftKings came public through a merger with a special purpose acquisition company called Diamond Eagle, but similar rules applied, a practice that has grown exponentially since then.
The company announced last week it is buying the online gambling subsidiary of Golden Nugget in a stock deal valued at $1.56 billion. The acquisition of Golden Nugget Online Gaming gives Boston-based DraftKings a well-known brand in the casino and gambling world and adds more than 5 million customers to the DraftKings iGaming accounts.
Needham started coverage last week and has a $73 price target, which compares with the $70.80 consensus target. Thursday’s closing print DraftKings stock was $44.79 a share.
While this is perhaps a lesser-known player to most investors, the brands it owns and runs are huge. Flutter Entertainment is the world’s largest bookmaker. It operates as a sports betting and gaming company in the United Kingdom, Ireland, Australia, the United States and elsewhere.
It offers sportsbooks and exchange sports betting products, daily fantasy sports products, and pari-mutuel betting products. It also offers fixed odds games betting products; online games and casinos; peer-to-peer games, including online bingo and poker; and business-to-business services. The company provides sports betting and gaming services through websites under the Paddy Power, Betfair, Sportsbet, TVG, FanDuel and Adjarabet brand names.
Back in December, the company drew one step closer to having complete ownership of fantasy sports and sports betting giant FanDuel after the sportsbook announced it was acquiring an additional 37% stake in the business, bringing its ownership position to 95%. Boyd Gaming owns the remaining 5% interest. Flutter is buying the position from FanDuel owner Fastball Holdings and will pay $2.1 billion in cash plus about 11.7 million in new Flutter stock. The acquisition will lift its ownership stake from 57.8%.
Jefferies has a $260 price target on the over-the-counter traded shares. They closed on Thursday at $187.53 apiece.