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Tuesday, April 27, 2021 10:43:22 AM
Analyst Deems DraftKings (DKNG) Stock a Winning Bet
By: Schaeffer's Investment Research | April 27, 2021
• Needham initiated coverage on the security with a "buy" rating
• The equity already sports an over 207% year-over-year lead
The shares of DraftKings Inc (NASDAQ:DKNG) are up 2.1% to trade at $60.46 at last check, after Needham initiated coverage of the security with a "buy" rating, as well as an $81 price target, which is a 36.8% premium to last night's close. The analyst in question sees the company as a leader in the North American gambling sector, with a market opportunity of $35 billion, and a regulatory environment that is currently supportive.
While DraftKings stock recently took a major step back from its March 22, all-time high of $74.38, shares bounced off the $54 mark last week. Today's pop has also helped DKNG push past resistance from the 10-day moving average, which came into place later in March. Longer term, the security sports an impressive 207.9% year-over-year lead.
A short squeeze could fuel additional tailwinds for DKNG. Short interest rose 36.8% in the most recent reporting period, and the 23.96 million shares sold short now make up 8.4% of the stock's available float.
A shift in the options pits may fuel even more additional gains. This is per DraftKings stock's Schaeffer's put/call open interest ratio (SOIR), which sits higher than 94% of readings in its annual range. In other words, investors have rarely been more put-biased.
Lastly, DKNG options are a bargain right now. The security's Schaeffer's Volatility Index (SVI) of 25% sits low at the fourth percentile of the past 12 months. In simpler terms, the security sports attractively priced premiums at the moment. What's more, its Schaeffer's Volatility Scorecard (SVS) ranks at 96 out of a possible 100, implying the stock has tended to exceed these volatility expectations in the past year -- a boon for option buyers.
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By: Schaeffer's Investment Research | April 27, 2021
• Needham initiated coverage on the security with a "buy" rating
• The equity already sports an over 207% year-over-year lead
The shares of DraftKings Inc (NASDAQ:DKNG) are up 2.1% to trade at $60.46 at last check, after Needham initiated coverage of the security with a "buy" rating, as well as an $81 price target, which is a 36.8% premium to last night's close. The analyst in question sees the company as a leader in the North American gambling sector, with a market opportunity of $35 billion, and a regulatory environment that is currently supportive.
While DraftKings stock recently took a major step back from its March 22, all-time high of $74.38, shares bounced off the $54 mark last week. Today's pop has also helped DKNG push past resistance from the 10-day moving average, which came into place later in March. Longer term, the security sports an impressive 207.9% year-over-year lead.
A short squeeze could fuel additional tailwinds for DKNG. Short interest rose 36.8% in the most recent reporting period, and the 23.96 million shares sold short now make up 8.4% of the stock's available float.
A shift in the options pits may fuel even more additional gains. This is per DraftKings stock's Schaeffer's put/call open interest ratio (SOIR), which sits higher than 94% of readings in its annual range. In other words, investors have rarely been more put-biased.
Lastly, DKNG options are a bargain right now. The security's Schaeffer's Volatility Index (SVI) of 25% sits low at the fourth percentile of the past 12 months. In simpler terms, the security sports attractively priced premiums at the moment. What's more, its Schaeffer's Volatility Scorecard (SVS) ranks at 96 out of a possible 100, implying the stock has tended to exceed these volatility expectations in the past year -- a boon for option buyers.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
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