DraftKings Inc (DKNG), a leading name in the sports betting world, kicked off the 2024 NFL season with a strong performance, seeing its app rise in the app store rankings and benefiting from a series of favorable betting outcomes. This success has led Needham analyst Bernie McTernan to reaffirm his Buy rating and $60 price target on DraftKings stock.
McTernan points to the New England Patriots’ victory over the Cincinnati Bengals in week one as a potential boon for DraftKings and other sportsbooks. The Patriots, despite being heavy underdogs, pulled off a 16-10 upset, resulting in a positive outcome for sportsbooks. This victory, combined with the fact that four of the most popular bets against the spread lost during the 1 pm ET and 4 pm ET games, suggests a lucrative weekend for sportsbooks. The Bengals, favored by 7.5 or 8.5 points, were the most heavily bet-on team against the spread, further contributing to sportsbooks’ early success.
Beyond these favorable betting outcomes, DraftKings also saw its app climb the sports app rankings. The DraftKings app secured the fifth position in the app store rankings for the sports category during the first week of the NFL season. This represents a significant jump from its ninth-place ranking during the NFL preseason, even surpassing rival FanDuel (FLUT), which remained at seventh place. This achievement positions DraftKings as the top-ranking sportsbook for the week.
Adding to its momentum, DraftKings integrated BetVision from Genius Sports (GENI) for the 2024 NFL season. BetVision, already available on several other sportsbooks like FanDuel, Caesars, and Fanatics, allows customers to watch local and national games directly through the sportsbook apps. The analyst emphasizes that, for DraftKings and FanDuel, the stream was accessible only to users who had placed a wager on the specific matchup.
McTernan highlights DraftKings’ recent statements indicating their focus on in-play betting during NFL games, with BetVision potentially playing a key role in achieving this goal. He anticipates DraftKings to further enhance its offering by adding additional betting options alongside the streaming content.
McTernan underscores DraftKings’ leading position in the North American online sports betting sector, citing its “sustainable customer acquisition strategy” as a driver of its market share. He predicts that DraftKings will maintain a first or second-place market share in all states where it operates.
DraftKings stock currently trades at $35.47, within a 52-week trading range of $25.73 to $49.57. The stock has experienced a 4.6% year-to-date increase in 2024.
