In this article, we discuss the 5 best gambling stocks to buy now. If you want to read our detailed analysis of these stocks, go directly to 15 Best Gambling Stocks to Buy Now.
5. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 43
DraftKings Inc. (NASDAQ:DKNG) is a sport betting operator, the company operates primarily in designing online fantasy sports software. DraftKings Inc. (NASDAQ:DKNG) ranks 5th on our list of the best gambling stocks to buy now.
Earlier this year, DraftKings Inc. (NASDAQ:DKNG) purchased sports betting content creator Vegas Sports Infromation Network, Inc. The acquisition enabled the expansion of content capabilities and extend audience reach.
This June, Morgan Stanley lowered DraftKings Inc.’s (NASDAQ:DKNG) price target from $63 to $58 and maintained an Overweight rating. Analyst Thomas Allen mentioned that the stock is attractive for long-term growth.
In the first quarter of 2021, DraftKings Inc.’s (NASDAQ:DKNG) revenue was up 253% year over year to $312 million Shares of DraftKing has also gained 25% over the last twelve months.
By the end of the first quarter of 2021, 43 hedge funds out of the 866 tracked by Insider Monkey held stakes in DraftKings Inc.’s (NASDAQ:DKNG) worth roughly $966 million.
Alger mentioned DraftKings Inc.’s (NASDAQ:DKNG) in its Q1 2021 investor letter:
“DraftKings Inc. was among the top contributors to performance. DraftKings is an online gaming operator. Its legacy Daily Fantasy Sports (DFS) allows users to virtually draft teams of players from professional sports leagues and potentially earn a payout based on how athletes perform. DraftKings Online Sports Betting (OSB) involves the company taking wagers or bets from customers on sporting events. Draft Kings’ third offering, Online Casino (iGaming), involves customers betting real money when playing casino games like slots and blackjack online. DFS is legal across most states, while approximately 25% of the population has access to OSB and approximately 10% has access to iGaming.
DraftKings recently hosted a bullish analyst day during which it increased its total addressable market estimate to approximately $65 billion if OSB and iGaming become legal in all states. At the same time, it raised its long-term revenue estimate to $5.4 billion and earnings before interest, taxes, depreciation and amortization to $1.78, an approximately 40% increase for both. It also discussed very strong customer retention. We believe DraftKings continues to be a great executor of its business strategy and it beat consensus revenues by nearly 40% for its most recent quarter. Online gaming is a very exciting market, and the monthly state numbers show that iGaming and OSB revenues/wagers continue to be very robust. Additionally,
DraftKings’ market share is strong with OSB and iGaming representing approximately 30%and 20%, respectively, of their markets. The potential for Canada and various U.S. states such as New York, Connecticut and Ohio to legalize sports betting
over the coming months could result in a multi-billion dollar revenue market.”
