This football season, plenty of gamblers are trying to cash in on bets placed on DraftKings’ (NASDAQ:DKNG) sports book platform. However, perhaps a better bet would’ve been entering a position in DKNG stock at the start of the year.

This once heavily favored online gambling play had clearly fallen to underdog status after having coughed back nearly all of its gains from 2020, 2021 and 2022.

The market was downbeat about the company’s future prospects, signaling a further de-rating ahead for the stock in 2023.

Yet over the past few quarters, sentiment has shifted back to bullish in a big way. No longer an underdog, DKNG is a heavy favorite once again.

But while DraftKings has resumed being a Wall Street darling, don’t assume shares have become over-hyped and at risk of reversing course.

Analysts and investors alike are on the money with their current bullishness for shares. Here’s why.

DKNG Stock and its Stunning Comeback

Nearly a year ago, it seemed as if the situation with DraftKings was on the verge of going from bad to worse. While beating on revenue, and reporting lower-than-expected losses, investors were reacting negatively to the prospect of slowing user growth.

However, back in January, this heavy bearishness dissipated.

In the weeks leading up to the release of Q4 2022 results last February, investors bid up DKNG stock, in anticipation of much stronger results and updates to guidance than in the preceding quarter.

This ended up playing out. During Q4 2022, DraftKings’ revenue grew by a staggering 81% year-over-year.

Guidance called for the company to hit positive EBITDA in 2024. While the stock pulled back some post-earnings, as many of these same speculators “sold on the news,” this pullback was relatively modest. Shares quickly got back on an upward trajectory.

The continued reporting of organic growth, combined with narrowing losses, have thus far enabled DKNG to make a partial rebound in price.

Better yet, even after the DKNG’s nearly 174% rally year-to-date, a further rally appears possible.

How Shares Could Keep Running Up the Score

Even in the low-teens per share, DKNG stock appeared pricey to the valuation-conscious. At current levels (around $30 per share), value-oriented investors may consider DraftKings’ valuation astronomical. Forecasts call for the company to report net losses both this year and next year.

Still, as shares have traded sideways since August, and high interest rates mean the market remains not that enamored with shares in unprofitable companies, DKNG could not only maintain its current valuation, but add to it in the months ahead.

Valuation and interest rate worries notwithstanding, the market always likes a great growth story.

Although legal sports betting and other types of online gambling have scaled up quickly in recent years, remember that the legalization wave isn’t done just yet, including in states like California, Florida and Texas. Plenty of large markets remain up for grabs.

In existing markets, DraftKings may be poised to stay a leading operator. At least, that’s the view of JP Morgan’s Joseph Greff, who last month argued that the company has a strong moat, which will help keep competition at bay.

Put it all together, and much suggests that DraftKings will stay in high-growth mode for the foreseeable future.

Bottom Line

Let’s be clear. After more than doubling in price, it may be difficult for DKNG to make a similarly-sized move over the next twelve months. The prospect of continued high double-digit revenue growth, and a continued move to GAAP profitability is already largely priced-in.

It’s hard to see DraftKings suddenly disappointing, in terms of operating performance, anytime soon. The company has scaled back on the generous promotions and heavy advertising that led to big losses during its initial expansion phase.

DraftKings, like other sports book operators, are also successfully shifted betting action toward parlay wagers, which offer greater payouts but have a much more pronounced house advantage.

While future gains may come at a far slower pace, as these trends continue, there’s no need to fade this favorite. Feel free to enter a position in DKNG stock.

DKNG stock earns a B rating in Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.