DraftKings (DKNG, $61.80) get buy rating, Wall Street-high price target at Needham

On Thursday, DraftKings  shares got a buy rating and Wall Street-high price target of $70 a share at Needham.

Needham analyst Brad Erickson initiated coverage of the sports betting company’s stock on Thursday. It views the company as one of the leading beneficiaries from online sports betting’s taking off in the U.S. – an opportunity that Needham estimates to be between $42 [billion] and $58 billion annually longer term.

According to Erickson, online providers' access to data creates a structurally better user experience vs. brick and mortar. For DraftKings in particular, the analyst sees its "datacentric approach to customer acquisition" as a force that’ll help the company "regularly exceed top-line forecasts."

Tickeron's analysis suggests: Momentum Indicator for DKNG turns positive, indicating new upward trend

DKNG saw its Momentum Indicator move above the 0 level on September 02, 2020. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 2 similar instances where the indicator turned positive. In 2 of the 2 cases, the stock moved higher in the following days. The odds of a move higher are at 90%.

Throughout the month of 08/31/20 - 10/01/20, the price experienced a +75% Uptrend. During the week of 09/24/20 - 10/01/20, the stock enjoyed a +22% Uptrend growth.

Technical Analysis (Indicators)

Bullish Trend Analysis

DKNG moved above its 50-day Moving Average on August 18, 2020 date and that indicates a change from a downward trend to an upward trend.

Following a +10.93% 3-day Advance, the price is estimated to grow further. Considering data from situations where DKNG advanced for three days, in 25 of 28 cases, the price rose further within the following month. The odds of a continued upward trend are 89%.

The Aroon Indicator entered an Uptrend today. In 10 of 11 cases where DKNG Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 90%.

Bearish Trend Analysis

The Stochastic Indicator demonstrated that the ticker has stayed in the overbought zone for 14 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.

DKNG broke above its upper Bollinger Band on October 01, 2020. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

Fundamental Analysis (Ratings)

Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 88%. During the last month, the daily ratio of advancing to declining volumes was 2.74 to 1.

The Tickeron PE Growth Rating for this company is 27 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Price Growth Rating for this company is 37 (best 1 - 100 worst), indicating steady price growth. DKNG’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron SMR rating for this company is 95 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Valuation Rating of 99 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (10.00) is normal, around the industry mean (3.78). DKNG has a moderately high P/E Ratio (615.43) as compared to the industry average of (144.51). Projected Growth (PEG Ratio) (0.00) is also within normal values, averaging (2.70). Dividend Yield (0.00) settles around the average of (0.11) among similar stocks. DKNG's P/S Ratio (136.92) is very high in comparison to the industry average of (7.46).

The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. DKNG’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 80, placing this stock worse than average.