DraftKings (NASDAQ:DKNG) has been making waves in the gaming industry with its impressive financial performance and market leadership. The company has exceeded expectations with its FY2023 and FQ1’24 earnings results, showcasing a +8.5% stock price return compared to the wider market at +16.4%. This success has led to an upgraded rating to a Buy from previously being rated as a Hold.
One of the key factors driving DraftKings’ success is its ability to retain and acquire new customers, as evidenced by the growth in its Monthly Unique Players (MUP) and Average Revenue Per MUP. The company’s recent acquisition of Golden Nugget Online Gaming and Jackpocket has also contributed to its top-line growth and expansion into new markets.
With a leading gaming market share in the US and raised FY2024 guidance, DraftKings is poised for continued growth and profitability. The consensus forward estimates project a strong CAGR in both top and bottom-line growth through FY2026, further supporting the company’s premium valuations.
Investors are taking notice of DraftKings’ potential, with the stock price showing a significant recovery since the start of 2023. Based on the management’s guidance and consensus estimates, the stock appears to be trading near fair value, with potential for further upside.
Overall, DraftKings’ compelling investment thesis and market leadership position make it a strong buy for investors looking to capitalize on the growth of the online gaming industry. It’s clear that being late to the game with DraftKings is better than never, especially when market leaders never come cheap.
