DraftKings (NASDAQ: DKNG) saw its stock price rise by 4.13% today on heavy volume, reaching a new 52-week high after positive comments from the company’s investor day. The increase in stock price came as DraftKings raised its 2023 earnings before interest, taxes, depreciation, amortization (EBITDA) and revenue estimates, while also unveiling strong forecasts for 2024.
At the investor day, DraftKings provided guidance for 2025, stating that it expects revenue in the mid-$5 billion range and adjusted EBITDA of $900 million. These figures are projected to grow to $6.2 billion and $1.4 billion, respectively, in the following year, with expectations of reaching $7.1 billion in sales and $2.1 billion in EBITDA by 2028.
DraftKings CEO Jason Robins emphasized the company’s commitment to innovation, stating, “We are not taking our foot off the gas. We believe that our velocity and pace of product innovation will continue to be faster than any other operator in the U.S. online gaming space.”
These positive outlooks from DraftKings were well-received by sell-side analysts, with Piper Sandler expressing their impression of the company’s estimates and reiterating an “overweight” rating and a $40 price target. Similarly, Craig-Hallum reiterated a “buy” grade on the stock while increasing its price estimate to $45 from $40. DraftKings stock closed the day at just over $37.
DraftKings is confident in its future growth potential as the top operator in the U.S. for iGaming and online sports betting gross revenue share. The company forecasts a total addressable market of $30 billion by 2028, compared to $20 billion today, based on the states in which it currently operates.
Looking ahead to 2024, DraftKings expects to be live in 25 states and Puerto Rico, with iGaming available in five jurisdictions. Robins anticipates more U.S. states legalizing online sports betting and iGaming, with at least eight states having sports betting legislation in the pipeline and a comparable number with online casino bills.
The company is also focused on evolving its product offerings to attract and retain customers. DraftKings plans to introduce progressive parlays, which would allow bettors to receive compensation even if one or more legs of the wager lose.
Overall, DraftKings is confident in its growth outlook and product offering, signaling a positive future for the company in the online gaming industry.