DraftKings is the IBD Stock Of The Day for Thursday. DraftKings stock flashed a bullish signal as it barrels toward a buy point to start 2024.
DraftKings stock spiked 5% early Thursday, surging above its 50-day moving average in strong volume. The stock reclaimed short-term support above its 21-day exponential moving average during its 4.2% jump Wednesday. The move put the stock in an early buy zone for risk-tolerant investors.
DKNG stock is also approaching a 39.35 buy point for a seven-week cup base.
Sports Betting Expansion
DraftKings stock has surged about 12% over the past week following the Jan. 11 launch of its sportsbook in Vermont. The Vermont rollout marked the 26th U.S. state in which DraftKings operates, as well as in Ontario, Canada.
Elsewhere, UBS said in an early Thursday research note that DraftKings should sustain a high online sports betting (OSB) market share. DraftKings' gross gambling revenue (GGR) has trended lower over the past three months. But that is likely due to the sports calendar ramping up for the NBA compared with Q3, analyst Robin Farley wrote. Meanwhile, newly launched rival ESPN Bet's OSB share has shown a consistent increase through Q4, but that hasn't translated to a consistent increase in the market share, measured by revenue. UBS maintained a buy rating on DKNG stock and its $44 price target.
DraftKings year-over-year losses improved every quarter since Q2 2022. In November, the Boston-based gaming company narrowed Q3 losses to 61 cents per share on a 57% revenue leap to $790 million.
During the investor presentation, DraftKings noted that betting participation is larger and growing faster than previously anticipated in multiple states. The company expects the total addressable OSB and iGaming market in states where the company operates to leap from $20 billion in 2023 to around $30 billion in 2028. The November forecast did not include Vermont, but added that sports gambling legalization is likely to expand to new states and areas.
DraftKings Stock
DraftKings' relative strength line is rebounding after a monthlong pullback. The stock has a 96 RS Rating out of a best-possible 99.
DraftKings has a 73 Composite Rating. The Composite Rating combines various technical indicators into one easy-to-read score. Although the company's losses have improved, the stock has a 64 EPS Rating.
DKNG ranks second in the Leisure-Gaming/Equipment Group according to the IBD Stock Checkup. Churchill Downs leads the group.
DraftKings stock vaulted 209% in 2023.
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