DraftKings Target of Unusually High Options Trading (NASDAQ:DKNG)

Key Points

• DraftKings saw unusually heavy options activity on Thursday, with traders buying 126,727 call options — about 210% above the typical volume of 40,842.
• The stock rose 4.3% as sentiment improved around the company’s growth outlook, especially after strong momentum in its prediction-markets business and bullish call buying.
• Wall Street remains generally constructive, with UBS raising its price target to $49 and the consensus rating still at “Moderate Buy,” even though the company recently missed EPS estimates while beating revenue expectations.

DraftKings Inc. (NASDAQ:DKNG - Get Free Report) saw some unusual options trading on Thursday. Traders bought 126,727 call options on the stock. This is an increase of 210% compared to the typical volume of 40,842 call options.

DraftKings Stock Up 4.3%

DKNG stock opened at $28.79 on Thursday. DraftKings has a twelve month low of $20.46 and a twelve month high of $48.78. The company has a market cap of $14.28 billion, a PE ratio of 479.83 and a beta of 1.66. The business's 50-day simple moving average is $24.17 and its 200 day simple moving average is $27.56. The company has a quick ratio of 1.02, a current ratio of 1.02 and a debt-to-equity ratio of 3.03.

DraftKings (NASDAQ:DKNG - Get Free Report) last announced its quarterly earnings results on Friday, May 8th. The company reported $0.20 EPS for the quarter, missing analysts' consensus estimates of $0.22 by ($0.02). The business had revenue of $1.65 billion for the quarter, compared to the consensus estimate of $1.63 billion. DraftKings had a return on equity of 13.51% and a net margin of 0.93%.The firm's revenue for the quarter was up 16.8% on a year-over-year basis. During the same quarter in the prior year, the business earned ($0.07) EPS. On average, research analysts anticipate that DraftKings will post 0.6 earnings per share for the current year.

Insider Activity at DraftKings

In other DraftKings news, Director Woodrow Levin sold 34,234 shares of the company's stock in a transaction that occurred on Monday, May 18th. The stock was sold at an average price of $25.71, for a total value of $880,156.14. Following the completion of the sale, the director directly owned 29,820 shares in the company, valued at $766,672.20. This represents a 53.45% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director Jocelyn Moore sold 2,150 shares of the company's stock in a transaction that occurred on Friday, March 13th. The stock was sold at an average price of $25.60, for a total value of $55,040.00. Following the completion of the sale, the director owned 1,406 shares of the company's stock, valued at $35,993.60. This trade represents a 60.46% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders have sold 37,246 shares of company stock valued at $957,031. Insiders own 47.18% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors have recently modified their holdings of the company. Vanguard Group Inc. raised its stake in shares of DraftKings by 3.1% in the fourth quarter. Vanguard Group Inc. now owns 44,758,204 shares of the company's stock valued at $1,542,368,000 after acquiring an additional 1,354,457 shares during the last quarter. Janus Henderson Group PLC raised its stake in shares of DraftKings by 9.3% in the first quarter. Janus Henderson Group PLC now owns 27,665,699 shares of the company's stock valued at $588,288,000 after acquiring an additional 2,351,790 shares during the last quarter. Viking Global Investors LP raised its stake in shares of DraftKings by 27.4% in the fourth quarter. Viking Global Investors LP now owns 19,119,912 shares of the company's stock valued at $658,872,000 after acquiring an additional 4,116,561 shares during the last quarter. Capital World Investors raised its stake in shares of DraftKings by 181.4% in the fourth quarter. Capital World Investors now owns 18,626,429 shares of the company's stock valued at $641,867,000 after acquiring an additional 12,008,357 shares during the last quarter. Finally, AQR Capital Management LLC increased its holdings in shares of DraftKings by 41.0% in the fourth quarter. AQR Capital Management LLC now owns 16,474,009 shares of the company's stock valued at $567,694,000 after purchasing an additional 4,788,337 shares in the last quarter. Institutional investors own 37.70% of the company's stock.

Key Headlines Impacting DraftKings

Here are the key news stories impacting DraftKings this week:

• Positive Sentiment: DraftKings reported rapid growth on its prediction-markets platform, with annualized consumer volume reaching $1.3 billion and total volume climbing to $3.1 billion, fueling optimism about a new growth engine. DraftKings Sees $1.3 Billion in Prediction Market Trading. The Stock Is Soaring.
• Positive Sentiment: Retail traders and options activity accelerated after the update, with call buying signaling expectations for more upside if prediction-market momentum continues. Call Traders Target DraftKings Stock Amid Strong Volume Growth
• Positive Sentiment: UBS reiterated a Buy rating on DraftKings, reinforcing the view that Wall Street is becoming more constructive on the company’s growth outlook. UBS Remains a Buy on DraftKings (DKNG)
• Neutral Sentiment: DraftKings CEO Jason Robins is scheduled to participate in an upcoming investor conference, which could provide more color on strategy but is not itself a major catalyst. DraftKings Announces Jason Robins' Participation in Upcoming Event
• Neutral Sentiment: DraftKings also had a short-interest filing showing no meaningful short base, which does not appear to be a major driver of the move.

Wall Street Analyst Weigh In

A number of analysts have recently issued reports on the company. UBS Group increased their target price on DraftKings from $43.00 to $49.00 and gave the company a "buy" rating in a report on Friday, June 5th. JPMorgan Chase & Co. dropped their price target on shares of DraftKings from $32.00 to $31.00 and set an "overweight" rating on the stock in a research note on Thursday, April 16th. Benchmark reaffirmed a "buy" rating on shares of DraftKings in a research note on Monday, June 1st. Northland Securities set a $27.00 price target on shares of DraftKings in a research note on Monday, May 11th. Finally, Barclays upped their price target on shares of DraftKings from $33.00 to $35.00 and gave the stock an "overweight" rating in a research note on Monday, May 11th. One research analyst has rated the stock with a Strong Buy rating, twenty-nine have issued a Buy rating, eight have assigned a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat, the company currently has a consensus rating of "Moderate Buy" and a consensus target price of $34.21.

DraftKings Company Profile

DraftKings Inc is a leading digital sports entertainment and gaming company specializing in daily fantasy sports, sports betting and iGaming products. The company provides an integrated platform where users can participate in daily fantasy contests, place wagers on professional sports events, and enjoy a range of online casino-style games. DraftKings' proprietary technology supports real-time odds, live scoring and advanced analytics to enhance the user experience across mobile and desktop applications.

Founded in 2012 by co-founders Jason Robins, Matthew Kalish and Paul Liberman, DraftKings began as a daily fantasy sports provider and rapidly expanded into regulated sports betting following legislative changes in the United States.

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