It’s been a pretty exciting year for DraftKings (NASDAQ:DKNG), but the stars have aligned in such a way that DraftKings stock could… go… all… the… way.
For one, just two years after a U.S. Supreme Court decision, the sports betting market is exceeding all expectations. In fact, according to ESPN, more than $20 billion has been spent with U.S. sportsbooks since the landmark decision. Two, 18 states now have regulated sports betting markets – with more to come.
In coming years, investors say more than half of U.S. states could offer legal sports betting. Three, sports betting outfits, like DraftKings are already witnessing solid growth.
Better, investors are being offered the opportunity of a lifetime.
DraftKings stock is one of the top ways to trade it. At $52.72, DKNG is still cheap, and could at least double from here on explosive catalysts.
The Disney Deal and DraftKings Stock
The company just signed a multi-year deal with Disney’s (NYSE:DIS) ESPN that will allow DraftKings to become “a co-exclusive Sportsbook link-out provider and exclusive daily fantasy sports provider of the media giant.”
So, when ESPN fans are checking out stories on ESPN, there will be link-outs to DraftKings, increase exposure even more. In fact, according to Evercore ISI analyst Kevin Rippey noted the deal will help increase brand awareness and help the company acquire new users.
“We’re not clear on the deal specifics,” Rippey wrote. “But given our expectation that DKNG will spend [more than $1 billion] in external marketing between now and 2023, even marginal savings by way of partnerships can add up to material dollars.”
DraftKings Deal With the New York Giants
The company also announced another sports partnership with the New York Giants. The deal will allow DKNG to access team trademarks and logos as it continues to build its brand.
“It’s about all the products,” Chief Business Officer Ezra Kucharz said. “We’re trying to service the sports fan, and the sportsbook and [daily fantasy sports] are important to us, and we’re going to create a lot of opportunities for fans to have fun.”
Better still, the company just secured an equity deal with Michael Jordan, who just joined as a special advisor to the board. That alone should add further legitimacy to the company. Better, during games DraftKings will get a boost in exposure during Giants’ home games. The company also signed a deal with the Chicago Cubs.
DraftKings Has a Road to Profitability
The company is already seeing solid growth. For the three months ended June 30, the company reported sales growth of 23.6% year over year to $70.9 million from $57.4 million year over year.
So, even when sports events had slowed with the pandemic, it still found a way to generate momentum. Better, analysts expect to see further growth to $745 million in 2021 from $514 million in 2020, according to Barron’s contributor Al Root.
Plus, it’s quickly expanding its position in the U.S. In the second quarter of 2020 alone, the company launched sports betting in Colorado, Pennsylvania, Illinois, and West Virginia. It’s also working on entering Virginia, Tennessee, and Michigan.
The Bottom Line on DraftKings Stock
Collectively, all of these catalysts combine to make the DKNG stock very attractive. Helping, we’re likely to see further sports better legalization throughout the U.S.
We’re likely to see even greater revenue from the ESPN deal. We could see far more partnerships like we’ve seen with the New York Giants. Plus, the online sports betting boom isn’t likely to slow any time soon.
With all of that, the DraftKings stocks could easily see higher highs moving forward. In my opinion, I’d buy it here and let it ride. It could… go… all… the… way.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities.
