The website home screen for DraftKings is displayed on a laptop computer.
is expected to report earnings results around Feb. 26. An analyst at Benchmark has raised his bar.
Analyst Mike Hickey increased his price target for
stock (ticker: DKNG) to $66 from $60 in a note on Sunday. He has a Buy rating on the stock, and expects the company to deliver a strong performance during its fiscal fourth quarter, while raising expectations for the year to come.
“The online sports betting and online casino markets have demonstrated remarkable growth,” Hickey wrote.
DraftKings stock is up about 212% since it went public via a merger with a special-purpose acquisition company in April. Though sports stalled early in the Covid-19 pandemic, the company has grown its offerings in the states that have legalized online sports betting and mobile casino games. After sports returned over the summer, more-developed markets like New Jersey saw record monthly online sports betting in the fall.
Analysts have also pointed to budget shortfalls as a spark that could lead more states to allow online sports betting to help plug budget gaps amid Covid-19.
“Regulatory momentum has been extremely encouraging and we anticipate revenue step up catalysts from ongoing state legalization,” Hickey writes. “DKNG should extend market share leadership from brand awareness and player acquisition investments.”
For the fiscal fourth quarter, Hickey anticipates revenue of $222 million, compared to consensus estimates of around $232 million. Looking beyond, he forecasts revenue of $843 million in the 2021 fiscal year.
DraftKings stock rose 1% on Monday but popped another 6.3% to $58.15 in after hours trading.