DraftKings Stock Predicted to Climb 35% by Wall Street Analyst

DraftKings (^{DKNG 1.08%}) has seen its stock value double over the past year, yet it might still have room to grow. Truist analyst Barry Jonas believes that there's a bullish forecast for the stock, predicting it could hit $55 soon—a 35% increase from its recent closing price.

Despite a decline following the company's disclosure of fourth-quarter earnings, the improving profitability and sustained revenue upsurge present a possibility for investors to consider the dip as a potential purchase.

Why Is Profitability Crucial for DraftKings?

With a significant opportunity in the online sports betting arena, the latest earnings report from DraftKings outlines expanding revenue and a larger slice of the market pie. Even after encountering some unfavorable betting results, the company's revenue jumped by 44% from the prior year.

Revenue is on an uptrend, and losses are shrinking. The company's net loss is down from $242 million in the same quarter last year to $44 million most recently. The loss margin now stands at negative 22%, showing rapid convergence towards a breakeven point while investments continue to enhance customer experience.

What Makes DraftKings Stock Appealing?

DraftKings hasn't just been gaining market share; it's also been making strides toward profitability which is a promising sign for the future. Management has forecasted the potential market to grow from $20 billion to $30 billion by 2028.

Considering the latest quarter's strong performance despite setbacks, it's clear that DraftKings is moving ahead of schedule on its path to profitability. Wall Street's optimism, therefore, remains high, and DraftKings is seen as a stock with considerable upside for the long-haul investor.

DraftKings, Stock, Analysis