Wall Street Zen Downgrades DraftKings (NASDAQ:DKNG) to Hold

Key Points

• DraftKings has been downgraded from a "buy" to a "hold" rating by Wall Street Zen, reflecting a shift in analyst sentiment regarding the stock's performance.
• Analysts have set varying price targets for DraftKings, with Northland Securities lowering its target significantly from $53.00 to $33.00, while Deutsche Bank maintained a $47.00 price objective.
• In its latest earnings report, DraftKings surpassed expectations with a revenue of $1.51 billion, indicating a 36.9% increase compared to the previous year.

DraftKings (NASDAQ:DKNG - Get Free Report) was downgraded by analysts at Wall Street Zen from a "buy" rating to a "hold" rating in a research note issued to investors on Friday.

A number of other research analysts have also commented on DKNG. Northland Securities reiterated an "under perform" rating and set a $33.00 price target (down from $53.00) on shares of DraftKings in a report on Wednesday. Deutsche Bank Aktiengesellschaft set a $47.00 price objective on DraftKings and gave the company a "hold" rating in a research report on Friday, August 8th. Barclays restated an "overweight" rating and set a $54.00 price objective (up from $51.00) on shares of DraftKings in a research report on Friday, August 8th. Truist Financial boosted their price objective on DraftKings from $50.00 to $55.00 and gave the company a "buy" rating in a research report on Wednesday, July 16th. Finally, Morgan Stanley restated an "overweight" rating and set a $52.00 price objective (up from $51.00) on shares of DraftKings in a research report on Friday, July 11th. Twenty-six investment analysts have rated the stock with a Buy rating, one has assigned a Hold rating and three have given a Sell rating to the company's stock. According to data from MarketBeat, the company presently has a consensus rating of "Moderate Buy" and an average price target of $53.89.

DraftKings Stock Performance

DKNG traded up $0.48 on Friday, hitting $35.37. The company had a trading volume of 22,236,367 shares, compared to its average volume of 12,926,122. The company's fifty day moving average price is $44.25 and its 200 day moving average price is $39.79. DraftKings has a 1-year low of $29.64 and a 1-year high of $53.61. The company has a debt-to-equity ratio of 1.82, a current ratio of 1.34 and a quick ratio of 1.34. The stock has a market cap of $17.56 billion, a price-to-earnings ratio of -54.42, a price-to-earnings-growth ratio of 0.91 and a beta of 1.99.

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

Insider Activity at DraftKings

In other news, Director Jocelyn Moore sold 4,861 shares of the stock in a transaction on Wednesday, August 13th. The stock was sold at an average price of $43.21, for a total transaction of $210,043.81. Following the sale, the director owned 1,461 shares in the company, valued at approximately $63,129.81. This represents a 76.89% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, insider Matthew Kalish sold 210,000 shares of the company's stock in a transaction on Tuesday, August 12th. The shares were sold at an average price of $42.90, for a total value of $9,009,000.00. Following the transaction, the insider directly owned 4,190,233 shares in the company, valued at $179,760,995.70. This trade represents a 4.77% decrease in their position. The disclosure for this sale can be found here. In the last ninety days, insiders have sold 658,331 shares of company stock valued at $29,285,365. 51.19% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On DraftKings

Several large investors have recently made changes to their positions in DKNG. GAMMA Investing LLC lifted its stake in shares of DraftKings by 5,118.8% during the first quarter. GAMMA Investing LLC now owns 48,952 shares of the company's stock valued at $1,626,000 after acquiring an additional 48,014 shares during the period. Rhumbline Advisers lifted its stake in DraftKings by 0.4% in the first quarter. Rhumbline Advisers now owns 586,722 shares of the company's stock valued at $19,485,000 after buying an additional 2,177 shares during the period. Merit Financial Group LLC acquired a new position in DraftKings in the first quarter valued at about $1,006,000. RFG Advisory LLC lifted its stake in DraftKings by 37.1% in the first quarter. RFG Advisory LLC now owns 8,944 shares of the company's stock valued at $297,000 after buying an additional 2,420 shares during the period. Finally, Stablepoint Partners LLC lifted its stake in DraftKings by 7.5% in the first quarter. Stablepoint Partners LLC now owns 7,207 shares of the company's stock valued at $239,000 after buying an additional 501 shares during the period. Institutional investors and hedge funds own 37.70% of the company's stock.

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.

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