DraftKings Inc. $DKNG Holdings Cut by Sequoia Financial Advisors LLC

Key Points

• Sequoia Financial Advisors sharply reduced its DraftKings stake by 95.9% in the fourth quarter, leaving it with 15,574 shares valued at about $537,000.
• DraftKings reported better-than-expected revenue of $1.65 billion for the quarter, but earnings of $0.20 per share missed analyst estimates by $0.02. Revenue still rose 16.8% from a year earlier.
• Wall Street remains cautiously positive: analysts have a Moderate Buy consensus on the stock with an average price target of $34.32, though recent target cuts and a downgrade to “strong sell” show mixed sentiment.

Sequoia Financial Advisors LLC decreased its stake in DraftKings Inc. (NASDAQ:DKNG - Free Report) by 95.9% in the fourth quarter, according to the company in its most recent filing with the Securities & Exchange Commission. The institutional investor owned 15,574 shares of the company's stock after selling 366,897 shares during the quarter. Sequoia Financial Advisors LLC's holdings in DraftKings were worth $537,000 at the end of the most recent quarter.

A number of other hedge funds and other institutional investors also recently added to or reduced their stakes in the stock. Gateway Investment Advisers LLC lifted its position in DraftKings by 215.6% in the 4th quarter. Gateway Investment Advisers LLC now owns 82,131 shares of the company's stock worth $2,830,000 after buying an additional 56,104 shares in the last quarter. RFG Advisory LLC raised its holdings in shares of DraftKings by 66.7% during the 4th quarter. RFG Advisory LLC now owns 29,838 shares of the company's stock valued at $1,028,000 after purchasing an additional 11,942 shares in the last quarter. Pinnacle Wealth Management Advisory Group LLC bought a new position in shares of DraftKings during the 4th quarter valued at $246,000. Montag A & Associates Inc. raised its holdings in shares of DraftKings by 82.5% during the 4th quarter. Montag A & Associates Inc. now owns 1,106 shares of the company's stock valued at $38,000 after purchasing an additional 500 shares in the last quarter. Finally, Strs Ohio raised its holdings in shares of DraftKings by 56.2% during the 4th quarter. Strs Ohio now owns 244,512 shares of the company's stock valued at $8,426,000 after purchasing an additional 88,020 shares in the last quarter. Hedge funds and other institutional investors own 37.70% of the company's stock.

DraftKings Stock Performance

NASDAQ:DKNG opened at $25.00 on Friday. DraftKings Inc. has a 1 year low of $20.46 and a 1 year high of $48.78. The firm's fifty day simple moving average is $23.68 and its 200 day simple moving average is $28.14. The company has a current ratio of 1.02, a quick ratio of 1.03 and a debt-to-equity ratio of 3.03. The firm has a market capitalization of $12.40 billion, a PE ratio of 416.67, a PEG ratio of 1.17 and a beta of 1.67.

DraftKings (NASDAQ:DKNG - Get Free Report) last posted its earnings results on Friday, May 8th. The company reported $0.20 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $0.22 by ($0.02). DraftKings had a net margin of 0.93% and a return on equity of 13.51%. The firm had revenue of $1.65 billion during the quarter, compared to analyst estimates of $1.63 billion. During the same quarter in the previous year, the business posted ($0.07) earnings per share. The business's quarterly revenue was up 16.8% compared to the same quarter last year. On average, sell-side analysts anticipate that DraftKings Inc. will post 0.56 EPS for the current year.

Wall Street Analysts Forecast Growth

A number of research analysts have recently weighed in on the stock. Stifel Nicolaus cut their price target on shares of DraftKings from $44.00 to $40.00 and set a "buy" rating on the stock in a report on Tuesday, February 17th. Bank of America cut their price target on shares of DraftKings from $37.50 to $30.00 and set a "neutral" rating on the stock in a report on Friday, February 13th. Rothschild & Co Redburn set a $35.00 price target on shares of DraftKings in a report on Friday, January 30th. Northland Securities set a $27.00 price target on shares of DraftKings in a report on Monday, May 11th. Finally, Truist Financial cut their price target on shares of DraftKings from $33.00 to $30.00 and set a "buy" rating on the stock in a report on Tuesday, April 21st. Twenty-seven investment analysts have rated the stock with a Buy rating, eight have given a Hold rating and three have assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, DraftKings presently has a consensus rating of "Moderate Buy" and an average price target of $34.32.

Key Stories Impacting DraftKings

Here are the key news stories impacting DraftKings this week:

• Positive Sentiment: Morgan Stanley said DraftKings could see an upside catalyst from the FIFA World Cup, which may drive incremental wagering activity over the next few months. DraftKings Faces Upside From FIFA World Cup Driving Incremental Wagers Over Next Few Months, Morgan Stanley Says
• Positive Sentiment: Oppenheimer reaffirmed its Buy rating on DraftKings, and another article argued that the company’s earnings quality looks stronger than the headline statutory profit suggests, supporting the view that fundamentals may be better than the stock’s reaction implies. Oppenheimer Reaffirms Their Buy Rating on DraftKings (DKNG) Statutory Profit Doesn't Reflect How Good DraftKings' NASDAQ: DKNG Earnings Are
• Positive Sentiment: DraftKings presented at MoffettNathanson’s Media, Internet & Communications Conference, which keeps management visible to investors and may help reinforce the company’s growth story. DraftKings Inc. (DKNG) Presents at MoffettNathanson's Media, Internet & Communications Conference Transcript
• Neutral Sentiment: Several articles focused on whether DraftKings is a “buy” based on Wall Street recommendations, but these pieces were largely commentary on analyst ratings rather than new company-specific developments. Is DraftKings (DKNG) a Buy as Wall Street Analysts Look Optimistic? Is DraftKings (DKNG) a Buy as Wall Street Analysts Look Optimistic?
• Neutral Sentiment: DraftKings also announced Alan Ellingson’s participation in an upcoming event, which is mostly an informational update with limited immediate stock impact. DraftKings Announces Alan Ellingson’s Participation in Upcoming Event
• Negative Sentiment: BNP Paribas Exane downgraded DraftKings to “strong sell,” adding pressure to the stock and reinforcing concerns that some analysts see downside from current levels. DraftKings was upgraded by BNP Paribas Exane to "strong sell"
• Negative Sentiment: Commentary from Jim Cramer and related coverage highlighted DraftKings’ weak share performance over the past year, while noting Argus cut its rating to Hold, which may have added to investor caution. Jim Cramer Discusses Drafkings’ (DKNG) Performance

Insider Activity

In related news, insider Paul Liberman sold 484,417 shares of the firm's stock in a transaction on Wednesday, March 11th. The shares were sold at an average price of $25.16, for a total value of $12,187,931.72. Following the transaction, the insider directly owned 213,597 shares in the company, valued at approximately $5,374,100.52. This trade represents a 69.40% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available through this link. Also, Director Jocelyn Moore sold 2,150 shares of the firm's stock in a transaction on Friday, March 13th. The shares were sold at an average price of $25.60, for a total transaction of $55,040.00. Following the completion of the transaction, the director owned 1,406 shares in the company, valued at $35,993.60. The trade was a 60.46% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last 90 days, insiders have sold 496,718 shares of company stock valued at $12,477,308. 47.18% of the stock is owned by corporate insiders.

About DraftKings

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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