Investors Buy Large Volume of DraftKings Call Options (NASDAQ:DKNG)

Key Points

• DraftKings saw a significant increase in options trading with 227,621 call options purchased, marking a 420% rise from the average volume.
• Analysts have a consensus of "Moderate Buy" on DraftKings, with 25 buy ratings and a target price averaging $55.15.
• Insider sales included key executives, with Matthew Kalish selling 210,000 shares for about $9 million, illustrating potential shifts in insider confidence.

DraftKings Inc. (NASDAQ:DKNG - Get Free Report) was the recipient of unusually large options trading activity on Tuesday. Investors acquired 227,621 call options on the stock. This is an increase of approximately 420% compared to the typical volume of 43,788 call options.

Analyst Upgrades and Downgrades

Several research analysts recently commented on the stock. Morgan Stanley reiterated an "overweight" rating and set a $52.00 price objective (up previously from $51.00) on shares of DraftKings in a research note on Friday, July 11th. Deutsche Bank Aktiengesellschaft set a $47.00 price target on shares of DraftKings and gave the company a "hold" rating in a research note on Friday, August 8th. Citigroup restated a "buy" rating on shares of DraftKings in a research note on Friday, July 11th. Truist Financial upped their price target on shares of DraftKings from $50.00 to $55.00 and gave the company a "buy" rating in a research note on Wednesday, July 16th. Finally, Sanford C. Bernstein initiated coverage on shares of DraftKings in a research note on Wednesday, June 4th. They set an "outperform" rating and a $46.00 price target on the stock. Twenty-five equities research analysts have rated the stock with a Buy rating and one has issued a Hold rating to the company. According to MarketBeat.com, DraftKings has a consensus rating of "Moderate Buy" and an average price target of $55.15.

Insider Transactions at DraftKings

In related news, insider Matthew Kalish sold 210,000 shares of the business's stock in a transaction that occurred on Tuesday, August 12th. The shares were sold at an average price of $42.90, for a total transaction of $9,009,000.00. Following the completion of the transaction, the insider owned 4,190,233 shares in the company, valued at $179,760,995.70. The trade was a 4.77% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. Also, CFO Alan Wayne Ellingson sold 44,693 shares of the business's stock in a transaction that occurred on Tuesday, August 19th. The stock was sold at an average price of $44.90, for a total transaction of $2,006,715.70. Following the transaction, the chief financial officer owned 128,131 shares of the company's stock, valued at approximately $5,753,081.90. This trade represents a 25.86% decrease in their position. The disclosure for this sale can be found here. In the last three months, insiders have sold 658,331 shares of company stock worth $29,285,365. Insiders own 47.08% of the company's stock.

Institutional Trading of DraftKings

Hedge funds have recently added to or reduced their stakes in the company. Brown Advisory Inc. boosted its holdings in DraftKings by 14.6% during the first quarter. Brown Advisory Inc. now owns 7,600 shares of the company's stock worth $252,000 after buying an additional 968 shares in the last quarter. IFM Investors Pty Ltd boosted its holdings in DraftKings by 9.3% during the first quarter. IFM Investors Pty Ltd now owns 83,750 shares of the company's stock worth $2,781,000 after buying an additional 7,147 shares in the last quarter. Capital Investment Advisory Services LLC purchased a new stake in DraftKings during the first quarter worth $515,000. Allspring Global Investments Holdings LLC boosted its holdings in DraftKings by 18.9% during the first quarter. Allspring Global Investments Holdings LLC now owns 2,728,482 shares of the company's stock worth $90,558,000 after buying an additional 434,525 shares in the last quarter. Finally, Kentucky Retirement Systems purchased a new stake in DraftKings during the first quarter worth $1,026,000. 37.70% of the stock is owned by hedge funds and other institutional investors.

DraftKings Stock Performance

Shares of NASDAQ:DKNG traded down $4.91 during midday trading on Tuesday, reaching $37.40. The company's stock had a trading volume of 44,800,785 shares, compared to its average volume of 10,219,320. The firm has a market capitalization of $18.57 billion, a PE ratio of -57.54, a P/E/G ratio of 1.00 and a beta of 1.73. DraftKings has a twelve month low of $29.64 and a twelve month high of $53.61. The stock has a fifty day moving average of $44.96 and a 200 day moving average of $39.88. The company has a quick ratio of 1.34, a current ratio of 1.34 and a debt-to-equity ratio of 1.82.

DraftKings (NASDAQ:DKNG - Get Free Report) last released its quarterly earnings data on Thursday, August 7th. The company reported $0.30 earnings per share for the quarter, topping analysts' consensus estimates of $0.16 by $0.14. The firm had revenue of $1.51 billion for the quarter, compared to analyst estimates of $1.39 billion. DraftKings had a negative net margin of 5.63% and a negative return on equity of 30.06%. The business's quarterly revenue was up 36.9% compared to the same quarter last year. During the same quarter in the prior year, the business earned $0.12 earnings per share. DraftKings has set its FY 2025 guidance at EPS. On average, equities analysts expect that DraftKings will post 0.64 EPS for the current fiscal year.

About DraftKings

DraftKings Inc operates as a digital sports entertainment and gaming company in the United States and internationally. It provides online sports betting and casino, daily fantasy sports, media, and other consumer products, as well as retails sportsbooks. The company also engages in the design and development of sports betting and casino gaming software for online and retail sportsbooks, and iGaming operators.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest and most accurate reporting. This story was reviewed by MarketBeat's editorial team prior to publication. Please send any questions or comments about this story to contact@marketbeat.com.