DraftKings' deal for VSiN expected to juice earnings in the long term
Mar. 30, 2021 10:22 AM ET
DraftKings Inc. (DKNG)
By: Clark Schultz, SA News Editor
The first impression from Jefferies analyst David Katz on DraftKings' (DKNG +0.7%) acquisition of VSiN is that it does not meaningfully alter the trajectory toward profitability near term, however positions DKNG for greater earnings power over the longer term.
"The acquisition of VSiN should expand the company's customer acquisition channel and in the long-run should help achieve greater CAC efficiency. We maintain that DKNG is very well positioned in US sports betting currently, with an established DFS presence, strong brand awareness, and first-mover advantages in many states. While marketing costs remain elevated in the near term, our valuation focus remains on the longer term," updates Katz.
It is noted that DraftKings is currently an official partner to the NBA, MLB, NFL, NASCAR, UFC, and PGA Tour and in has an existing partnership with ESPN in conjunction with Caesars.
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