10 Best Leisure Stocks To Buy Now

4. DraftKings Inc. (NASDAQ:DKNG)

Number of Hedge Fund Holders: 56

Revenue Growth Rate (year-over-year): 63.60%

Founded in 2012, DraftKings Inc. (NASDAQ:DKNG) is a pioneer in the daily fantasy sports industry. The company then entered the online sports and casino gaming marketplaces in response to a 2018 Supreme Court ruling permitting states to permit online sports wagering. It became the industry leader in sports betting and iGaming in North America and today has a 70% revenue share with FanDuel.

Roughly 40% of Canadians can now access DraftKings’ iGaming products in seven states and its online or retail sports betting in 25 states. The firm also develops and licenses online games and operates a commission-based, non-fungible token marketplace.

In 2023, the revenue surged by 63.60% YoY, driven primarily by continued healthy customer engagement, efficient acquisition of new customers,

The firm reported Q2 2024 revenues of $1104 million, a 26.2% YoY increase led by organic growth factors, and new market entries, which just missed Wall Street estimations, even though adjusted EPS of $0.22 beat expectations. Despite a decent performance, DKNG shares fell by about 4% after the Q2 2024 data were released.

The company raised its revenue forecast for 2024, but adjusted EBITDA was lower due to increased client acquisition expenses and a change in the Illinois tax rate.

Analysts at Morningstar predict that by 2030, the massive online gambling market in North America will be well-positioned to capitalize on the $40 billion sports betting and iGaming market there. Nevertheless, since some states have more than twenty state licenses, there is intense competition among online gaming companies.

Benchmark recently raised its price target for DraftKings Inc. (NASDAQ:DKNG) from $41 to $44, maintaining its Buy recommendation on the company’s shares. The analyst states that DraftKings remains “a top idea for 2024.” With shares down 2% so far this year, a “strong run” for the stock is anticipated till year-end. DraftKings’ better outlook, according to the analyst, “creates an attractive entry point,” as a result of increased market win margins in Q3, the development of new users, the application of traditional tax reduction strategies, and valuation contraction in advance of the NFL season.

Paul Marshall And Ian Wace’s Marshall Wace LLP is the largest shareholder in the company, with 9,410,431 shares worth $359.20 million.