DraftKings (NASDAQ:DKNG) Stock Rating Lowered by Zacks Research

Key Points

• Zacks Research downgraded DraftKings from “hold” to “strong sell,” although the broader analyst consensus remains “Moderate Buy” with an average price target of $33.70.
• DraftKings shares opened at $18.90, down 4.2%, near their one-year low of $18.50 and below both their 50-day and 200-day moving averages.
• The company’s latest quarter showed mixed results: EPS of $0.09 exceeded estimates, but revenue of $1.44 billion missed expectations and declined 4.6% year over year; the company also reported negative net margin and return on equity.

DraftKings (NASDAQ:DKNG - Get Free Report) was downgraded by research analysts at Zacks Research from a "hold" rating to a "strong sell" rating in a research note issued to investors on Tuesday, Zacks reports.

DKNG has been the subject of a number of other research reports. Needham & Company LLC reissued a "buy" rating and issued a $35.00 target price on shares of DraftKings in a research note on Friday, September 18th. Northland Securities set a $28.00 price objective on DraftKings in a research report on Monday, August 10th. JPMorgan Chase & Co. cut their target price on shares of DraftKings from $34.00 to $33.00 and set an "overweight" rating on the stock in a report on Monday, August 10th. Guggenheim cut their target price on shares of DraftKings from $33.00 to $30.00 and set a "buy" rating on the stock in a report on Wednesday, October 7th. Finally, Wolfe Research assumed coverage on shares of DraftKings in a report on Wednesday, September 2nd. They set an "outperform" rating and a $40.00 price target for the company. One investment analyst has rated the stock with a Strong Buy rating, thirty have assigned a Buy rating, six have given a Hold rating and three have issued a Sell rating to the stock. Based on data from MarketBeat.com, DraftKings presently has a consensus rating of "Moderate Buy" and an average price target of $33.70.

DraftKings Stock Down 4.2%

Shares of NASDAQ DKNG opened at $18.90 on Tuesday. DraftKings has a one year low of $18.50 and a one year high of $36.98. The company has a debt-to-equity ratio of 3.22, a current ratio of 1.02 and a quick ratio of 1.02. The firm's 50 day simple moving average is $22.90 and its two-hundred day simple moving average is $24.01. The stock has a market capitalization of $9.38 billion, a P/E ratio of -49.74, a PEG ratio of 1.99 and a beta of 1.61.

DraftKings (NASDAQ:DKNG - Get Free Report) last announced its quarterly earnings data on Friday, August 7th. The company reported $0.09 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.02 by $0.07. The company had revenue of $1.44 billion during the quarter, compared to analysts' expectations of $1.51 billion. DraftKings had a negative net margin of 2.68% and a negative return on equity of 11.26%. The firm's revenue was down 4.6% on a year-over-year basis. During the same quarter in the prior year, the company earned $0.30 EPS. As a group, analysts expect that DraftKings will post 0.40 EPS for the current fiscal year.

Insider Buying and Selling at DraftKings

In related news, Director Jocelyn Moore sold 10,759 shares of DraftKings stock in a transaction dated Wednesday, August 19th. The stock was sold at an average price of $24.05, for a total value of $258,753.95. Following the completion of the sale, the director directly owned 1,881 shares in the company, valued at approximately $45,238.05. This trade represents a 85.12% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 47.18% of the stock is owned by corporate insiders.

Institutional Trading of DraftKings

Institutional investors have recently made changes to their positions in the stock. Wealth Forward LLC increased its holdings in DraftKings by 23.4% in the 3rd quarter. Wealth Forward LLC now owns 13,537 shares of the company's stock valued at $257,000 after acquiring an additional 2,563 shares during the last quarter. Farther Finance Advisors LLC lifted its position in DraftKings by 17.3% during the third quarter. Farther Finance Advisors LLC now owns 15,750 shares of the company's stock valued at $299,000 after purchasing an additional 2,324 shares during the last quarter. CX Institutional lifted its holdings in shares of DraftKings by 213.8% in the 3rd quarter. CX Institutional now owns 3,876 shares of the company's stock valued at $74,000 after acquiring an additional 2,641 shares during the last quarter. QRG Capital Management Inc. boosted its holdings in shares of DraftKings by 30.6% in the 2nd quarter. QRG Capital Management Inc. now owns 65,476 shares of the company's stock worth $1,654,000 after purchasing an additional 15,358 shares during the period. Finally, Envestnet Portfolio Solutions Inc. raised its stake in shares of DraftKings by 9.0% in the second quarter. Envestnet Portfolio Solutions Inc. now owns 13,744 shares of the company's stock valued at $347,000 after acquiring an additional 1,139 shares during the period. Hedge funds and other institutional investors own 37.70% of the company's stock.

DraftKings Company Profile

DraftKings Inc is a digital sports entertainment and gaming company that provides online sports betting, daily fantasy sports and internet-based casino gaming. Its products are delivered through mobile applications and websites, allowing customers to wager on professional and collegiate sports, participate in fantasy contests and play a range of casino games where permitted by law.

The company also offers sports and betting-related content through DraftKings Network and operates additional gaming and entertainment products, including online lottery services in select markets.

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