DraftKings
DraftKings
DKNG
$4.77
16.44%
412%
IBD Stock Analysis
- Shares surge past multiple early entries on beat-and-raise earnings report
- Closing in on official 34.49 buy point, but extended from 50-day line
- Relative strength line already at highs
Industry Group Ranking
Emerging Pattern
Consolidation
* Not real-time data. All data shown was captured at
12:57PM EDT on
11/03/2023.
The DraftKings (DKNG) phenomenon continues as the company surges on an impressive earnings report. Here’s a closer look at what’s driving the stock.
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The gaming industry is experiencing a surge, and DraftKings is at the forefront, driven by the Taylor Swift-Travis Kelce craze.
DraftKings Stock
The stock price of DraftKings soared by almost 16.5% to $33.75 on the stock market today. The company’s stock surpassed multiple early entry points, showcasing a strong bullish signal.
DraftKings stock demonstrated a gap above its 50-day moving average and a trendline drawn from the August 4 peak, providing an alternative entry at $31.10. Additionally, DKNG stock cleared the $32.65 entry point and achieved its highest closing price since December 2021.
An official consolidation buy point for DKNG stock is at $34.49.
The relative strength line for DraftKings stock reached a new high on Friday, indicating potential for a breakout. This is marked by a blue dot at the end of its RS line on the daily and weekly MarketSmith charts.
While DKNG stock was actionable on Friday morning, it now appears to be extended from its 50-day moving average and earlier entry points. Ideally, shares would consolidate and form a handle before a breakout.
DraftKings has a Composite Rating of 77 out of 99. This rating combines various technical indicators into an easily understandable score.
Furthermore, the RS Rating for this gaming stock is 97 out of 99, indicating strong relative strength compared to other stocks. This rating has increased from 96 a week ago and 36 one year ago.
DraftKings Earnings
DraftKings, a relatively new company that has been incurring losses, currently has a mediocre EPS Rating of 68 due to its short earnings history.
Founded in 2011, DraftKings went public in 2020 through a blank-check merger deal.
In the third quarter, DraftKings reported earnings that beat expectations, with revenue and user growth exceeding forecasts. The Boston-based gaming company narrowed its losses in Q3 to 61 cents per share, while achieving a 57% increase in revenue to $790 million.
According to FactSet, Wall Street analysts expressed positivity towards DraftKings, highlighting their approval of product execution, market share improvement for the fourth consecutive quarter, progress in business initiatives, and expense management.
Since Q2 2022, DraftKings has been consistently reducing year-over-year losses.
Analysts anticipate that the company will achieve its first annual profit in 2025.
Although sales growth is slowing down, it remains robust, ranging from 57% to 88% over the past four quarters.
In addition to strong earnings, DraftKings raised its 2023 revenue guidance to $3.695 billion and its adjusted EBITDA guidance to negative $105 million.
“Our momentum from the third quarter has continued through October and the start of the
