PBTHF - DraftKings jumps to new 52-week high with investors confident on the profitability timeline

2023-07-10 15:28:02 ET

DraftKings ( NASDAQ: DKNG ) rallied to a new 52-week high on Monday as the pending deal for PointsBet's ( OTCQX:PBTHF ) U.S. business and the expectation the Boston-based company will achieve profitability on an adjusted EBITDA basis helped buoy positive sentiment.

The sports betting stock continues to viewed favorably by analysts up and down the Street. Of note, Oppenheimer recently bumped its price target to $36 from $30 on higher user engagement, and BTIG Research called DKNG a top pick for the second half of the year. "DraftKings ( DKNG ) is expected to benefit from favorable fundamentals in 2023, including product improvements, an increasing parlay mix, a positive operating backdrop, and improved efficiency, which could drive significant upside in estimates and positive revisions," BTIG said. Morgan Stanley also recently reiterated an Overweight rating on DraftKings ( DKNG ) as it pushed up its 2023-25 digital estimates to reflect consolidation of market share, a shorter path to profitability, and a faster ramp of new states.

DraftKings ( DKNG ) is not expected to report earnings until early August, but sell-side confidence is brimming. The last 20 EPS revisions from analysts have all been to the upward side and 19 analysts have a Buy-equivalent rating on the stock vs. 13 Hold-equivalent ratings and 4 Sell-equivalent ratings. Notably, DraftKings ( DKNG ) ripped a double-digit gain after its last earnings report. Seeking Alpha analyst Geoffrey Seiler thinks DKNG could generate positive EBITDA in Q2 to give the current rally a fresh pair of legs.

Shares of DKNG were up 7.96% at 3:22 p.m. and swapped hands as high as $28.79 per share. The trading volume on the sports betting stock was over 11.7M shares.

More on DraftKings:

• BTIG unveils top picks for rest of '23: D.R. Horton, CrowdStrike, DraftKings among names
• Fanatics wins race for PointsBet's U.S. business over DraftKings
• Sports betting investors eye DraftKings M&A and Fanatics IPO
• Recent option trades on DraftKings

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