Yahoo Finance Live anchors Seana Smith and Akiko Fujita discuss DraftKings' growth outlook after the company gets upgraded to Buy at UBS.
AKIKO FUJITA: Shares of DraftKings closing the day higher following an upgrade to buy over at UBS. The analyst citing higher revenue growth and points to the growing number of states that are legalizing online sports gambling. The stock price target was also raised from $19 to $30 a share. Seana, the analyst specifically saying that revenue could be growing at a compound annual growth rate of more than 20% from 2023 to 2026.
I am curious though, about the potential catalysts here. Because we've talked about sports betting in the past, saying that, look, if you look at how many states are left to legalize and how big those markets are, they simply aren't the ones that we were looking at like in New Jersey, like in New York. You have to wonder how many more catalysts there are to push things to the upside.
SEANA SMITH: And also, Akiko, the fact that there could likely be more competitors within this space. We talk a lot about FanDuel and DraftKings dominating this market right now. But fanatics, obviously, getting into this space as well. You would think more companies potentially could chip away this market share here.
But when it comes to the trading action today, we're looking at DraftKings at a 52-week high. One of the encouraging things that UBS did point to in this note here is that sales in existing states, that they're generating more revenue per player than they had been. Obviously, a trend that is in favor here to DraftKings and potentially here to FanDuel. When we look across the space more and more people spending more money on sports gambling, obviously, will help the industry grow here over the coming quarters. But, again, over the last two years, you're still looking at losses of just over 40%.