DraftKings ' stock climbed as much as 10% on Tuesday afterCathie Wood 'sARK Invest Next Generation Internet ETF purchased shares.- Further, the research firm Benchmark on Monday raised its price target on DraftKings to $66, from $60.
- Analysts say the company is set to benefit from more states loosening gambling regulations and Google allowing gambling apps on its store.
- DraftKings saw revenues surge 98% in its most recently reported quarter.
Shares of DraftKings climbed as much as 10% on Tuesday as Cathie Wood's ARK Invest Next Generation Internet ETF purchased shares in the online sports gambling company.
According to a holdings report from the actively managed ARK Next Generation Internet ETF, dated February 1, the fund currently holds 620,300 shares of DraftKings, worth some $33.9 million.
The stock represents just 0.49% of the ETFs total holdings, but the move comes at an important time for DraftKings as the company expands its sportsbook offerings and US online gambling regulations cool.
Further, the research firm Benchmark on Monday raised its price target on DraftKings to $66, from $60.
Since May 2018, when the Supreme Court overturned the Professional and Amateur Sports Protection Act, or PASPA - a law that banned
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Google also recently revealed changes to its policies that will enable companies to place gambling apps on the Google Play store for users in 15 countries, including the US. The company said that the new rules apply to any developer as long as it completes an application process and is deemed an approved operator by the government within its respective country.
The change will bring DraftKings' app to the Google Play store for the first time in March.
The Boston-based company has been taking advantage of the changing attitudes toward sports gambling over the past few years, growing revenue substantially. In the company's latest SEC filings, it revealed 98% year-over-year revenue growth and pushed its full-year guidance to $560 million from $540 million.
Still, DraftKings has struggled with profitability. The company lost $3.26 per share in 2019, and analysts expect the gambling firm to lose $1.92 per share when they report full-year results for 2020. In the company's most recent quarter, which ended on Sept. 30, 2020, it reported a $0.98 loss per share versus a $0.30 loss for the year-ago period.
Despite the profitability woes and a lofty valuation of 58-times sales, analysts are mostly bullish on DraftKings. The company boasts 26 "buy" ratings, 8 "neutral" ratings, and just one "sell" ratings from analysts.