Opinions
Jim Cramer - Mad Money
DraftKings
DKNG-Q
BUY
Jul 09, 2025
Stock price when the opinion was issued
You might be interested:
Historically, stock does well in football season from now until the Super Bowl. Not a long-term, core holding. Get in, make some $$, get out. Technical setup looks really nice. Seasonally strong period for sports betting. Leader in the industry. No dividend.
(Analysts’ price target is $49.30)Great fundamentals, though a quarter of the US still bans sports betting. DKNG has done a good job increasing parlay use. Delta just announced a partnership--we'll see how that plays out. iGaming saw a 14% bounce last quarter in customer count YOY; it's small, but has a lot of room to expand. Overall, DKNG has a lot going for it, and it does well during the NFL playoffs. Also, shares are down a lot, so shares are cheap.
The space has really grown in NA, and this should continue. About 41x forward PE, but growth rate among it and peers is between 30-50% depending on the name. High beta, well over 1.5x the S&P, so it's volatile. 200-day MA inching sideways, slightly upwards more recently; stock price is above that. In general, technicals are neutral. Small position only.
Interesting over a long horizon. Short term, it's more a question of how it grows amidst the broader market. What's the rate of legalization of online sports betting? Nice, sanitized way of saying gambling on your phone, which is becoming more popular, ubiquitous, and normalized in our culture. Many states still need to legalize.
For a lower-beta choice, look at FLTR.
Is -6.92% in one year. Ever since rallying in September, shares have tanked 28%. September is important in sports betting, because it's the start of football season. A year ago, DKNG suffered because more of the favourites were winning, so DKNG was paying out more. Meanwhile there is more betting (on anything) on the internet in prediction markets like Kalshi, offering strong competition to DKNG. He still believes in this, though you can wait until they report at the end of the month.
A new law means that professional bettors will pay taxes on their winnings (but don't get a full tax deduction on losses). However, this could discourage bettors. However, since mid-June when the legislation was unveiled the shares of DKNG and FLUT have been rallying. Major sports books already discourage bettors who win too often. Also, the books cater to VIPs, those who bet a lot but don't win as much as the big winners. There's a chance this bill may not pass or could be amended. The two stocks hold a duopoly in sports betting, and more states are legalizing sports betting, so he remain bullish in them.