DraftKings (NASDAQ:DKNG) Stock Rating Lowered by Wall Street Zen

Key Points

• Wall Street Zen downgraded DraftKings from “sell” to “strong sell.” Analyst views remain mixed overall, with MarketBeat reporting a “Moderate Buy” consensus and an average price target of $27.61.
• DraftKings missed quarterly expectations, reporting a loss of $0.53 per share versus an expected loss of $0.41 and revenue of $1.33 billion versus estimates of $1.39 billion. Revenue nevertheless increased 16.2% year over year.
• Investor concerns include the planned increase in spending on DraftKings’ Predictions business, which could weigh on near-term costs and profitability.

DraftKings (NASDAQ:DKNG - Get Free Report) was downgraded by Wall Street Zen from a "sell" rating to a "strong sell" rating in a research report issued on Saturday, Wall Street Zen reports.

Several other equities analysts have also recently commented on DKNG. Susquehanna reiterated a "positive" rating and set a $23.00 target price on shares of DraftKings in a research note on Monday. Zacks Research raised shares of DraftKings from a "strong sell" rating to a "hold" rating in a report on Wednesday. Wells Fargo & Company downgraded shares of DraftKings from an "overweight" rating to an "equal weight" rating and reduced their price objective for the company from $30.00 to $21.00 in a research note on Monday, November 9th. Weiss Ratings lowered shares of DraftKings from a "sell (d)" rating to a "sell (e+)" rating in a research note on Friday, August 21st. Finally, UBS Group downgraded DraftKings from a "buy" rating to a "neutral" rating and reduced their target price for the stock from $48.00 to $22.00 in a report on Monday. One equities research analyst has rated the stock with a Strong Buy rating, twenty-five have given a Buy rating, eleven have issued a Hold rating and two have assigned a Sell rating to the company. Based on data from MarketBeat, DraftKings presently has a consensus rating of "Moderate Buy" and an average price target of $27.61.

DraftKings Stock Down 1.2%

NASDAQ:DKNG opened at $18.89 on Friday. The company has a debt-to-equity ratio of 12.21, a current ratio of 0.99 and a quick ratio of 1.02. The firm has a 50-day moving average of $20.99 and a two-hundred day moving average of $23.77. DraftKings has a 1-year low of $16.55 and a 1-year high of $36.98.

DraftKings (NASDAQ:DKNG - Get Free Report) last announced its earnings results on Thursday, November 5th. The company reported ($0.53) earnings per share for the quarter, missing the consensus estimate of ($0.41) by ($0.12). DraftKings had a negative net margin of 5.91% and a negative return on equity of 43.92%. The business had revenue of $1.33 billion for the quarter, compared to analyst estimates of $1.39 billion. During the same quarter in the prior year, the business earned ($0.26) earnings per share. The firm's revenue was up 16.2% on a year-over-year basis. As a group, equities analysts anticipate that DraftKings will post 0.31 earnings per share for the current fiscal year.

Insider Transactions at DraftKings

In other DraftKings news, Director Gregory Wendt purchased 5,000 shares of DraftKings stock in a transaction dated Wednesday, November 11th. The shares were bought at an average cost of $19.76 per share, for a total transaction of $98,800.00. Following the transaction, the director owned 22,920 shares in the company, valued at $452,899.20. This represents a 27.90% increase in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, Director Jocelyn Moore sold 10,759 shares of DraftKings stock in a transaction dated Wednesday, August 19th. The shares were sold at an average price of $24.05, for a total transaction of $258,753.95. Following the completion of the transaction, the director directly owned 1,881 shares of the company's stock, valued at $45,238.05. This trade represents a 85.12% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders own 47.18% of the company's stock.

Hedge Funds Weigh In On DraftKings

Hedge funds and other institutional investors have recently bought and sold shares of the stock. CoreCap Advisors LLC raised its position in shares of DraftKings by 336.5% during the 2nd quarter. CoreCap Advisors LLC now owns 1,148 shares of the company's stock worth $29,000 after purchasing an additional 885 shares during the period. Basecamp Wealth Advisors LLC lifted its holdings in shares of DraftKings by 3,547.1% in the 1st quarter. Basecamp Wealth Advisors LLC now owns 1,240 shares of the company's stock worth $27,000 after purchasing an additional 1,206 shares during the last quarter. Heritage Family Offices LLP bought a new stake in shares of DraftKings in the 3rd quarter worth approximately $44,000. Mirae Asset Global Investments Co. Ltd. bought a new stake in shares of DraftKings in the 3rd quarter worth approximately $48,000. Finally, CX Institutional boosted its position in DraftKings by 213.8% during the 3rd quarter. CX Institutional now owns 3,876 shares of the company's stock valued at $74,000 after purchasing an additional 2,641 shares during the period. 37.70% of the stock is currently owned by institutional investors and hedge funds.

DraftKings News Roundup

Investors following DKNG have been watching these news items:

• Neutral Sentiment: Zacks Research raised its rating from “strong sell” to “hold,” a less negative view but not a buy recommendation. Zacks rating change
• Negative Sentiment: The main concern is DraftKings’ planned increase in investment in its Predictions business. A report says the company disclosed that its annual investment would double before year-end, prompting a sharp selloff and raising concerns about near-term costs and profitability. Securities investigation notice
• Negative Sentiment: Analyst caution has also weighed on sentiment: Wells Fargo downgraded the stock, and several firms cut price targets. The latest reported quarter also missed analyst expectations for both adjusted earnings per share and revenue, despite year-over-year revenue growth. Wells Fargo downgrade

DraftKings Company Profile

DraftKings Inc. is a digital sports and entertainment company founded in 2012. It began as a daily fantasy sports platform and has since expanded into online sports betting and gaming. The company offers daily fantasy contests, a sportsbook and online casino products, including games such as slots and table games. Its services are available in a range of U.S. jurisdictions and in Ontario, Canada, where permitted by local regulations. DraftKings is headquartered in Boston, Massachusetts. Co-founder Jason Robins serves as the company's chief executive officer.

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