Stock Traders Purchase High Volume of Call Options on DraftKings (NASDAQ:DKNG)

DraftKings Inc. (NASDAQ:DKNG) saw some unusual options trading on Friday. Stock investors bought 82,021 call options on the stock. This is an increase of 106% compared to the average volume of 39,872 call options.

Wall Street Analysts Forecast Growth

Several equities analysts have issued reports on the stock. Zacks Research raised shares of DraftKings from a “strong sell” rating to a “hold” rating in a report on Wednesday, May 20th. Jefferies Financial Group reissued a “buy” rating on shares of DraftKings in a research note on Wednesday, June 10th. Deutsche Bank Aktiengesellschaft upped their price target on shares of DraftKings from $26.00 to $28.00 and gave the stock a “hold” rating in a research report on Thursday, July 9th. Benchmark raised their price target on shares of DraftKings from $29.00 to $30.00 and gave the company a “buy” rating in a research note on Friday, August 7th. Finally, TD Cowen raised their price target on shares of DraftKings from $30.00 to $35.00 and gave the company a “buy” rating in a research note on Friday, July 10th. One analyst has rated the stock with a Strong Buy rating, twenty-nine have given a Buy rating, eight have assigned a Hold rating and two have issued a Sell rating to the company. According to data from MarketBeat.com, DraftKings currently has an average rating of “Moderate Buy” and a consensus target price of $34.11.

DraftKings Trading Up 4.3%

Shares of DKNG stock opened at $25.26 on Friday. DraftKings has a fifty-two week low of $20.46 and a fifty-two week high of $48.78. The company has a debt-to-equity ratio of 3.22, a quick ratio of 1.02 and a current ratio of 1.02. The stock’s fifty day moving average is $24.87 and its two-hundred day moving average is $24.54. The firm has a market capitalization of $12.54 billion, a P/E ratio of -66.47 and a beta of 1.66.

DraftKings (NASDAQ:DKNG) last released its earnings results on Friday, August 7th. The company reported $0.09 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.02 by $0.07. The business had revenue of $1.44 billion during the quarter, compared to analyst estimates of $1.51 billion. DraftKings had a negative net margin of 2.68% and a negative return on equity of 11.26%. The company’s revenue for the quarter was down 4.6% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $0.30 earnings per share. Research analysts expect that DraftKings will post 0.51 earnings per share for the current fiscal year.

Trending Headlines about DraftKings

Here are the key news stories impacting DraftKings this week:

• Positive Sentiment: A Ninth Circuit appeals court ruled that sports bets are not swaps, reducing the risk that DraftKings’ wagers could face additional derivatives regulation. The decision also supports industry-wide regulatory clarity and helped drive a broader rally in DraftKings and Flutter Entertainment. DKNG and FLUT Rally on Sports-Bets Ruling
• Positive Sentiment: An analyst comparison argued that DraftKings has stronger growth prospects than Flutter, citing sportsbook gains, improved customer economics and expansion of its Predictions product. DraftKings vs. Flutter Growth Prospects
• Positive Sentiment: DraftKings’ Predictions platform is receiving additional promotional exposure through a bonus offer tied to a Commanders-Ravens prediction market, potentially supporting customer engagement and product adoption. DraftKings Predictions Promotion
• Positive Sentiment: Investors purchased approximately 82,021 DKNG call options, about 106% above average call volume. While options activity does not guarantee further gains, it signals increased speculative interest in the shares.
• Neutral Sentiment: DraftKings introduced a system allowing loyalty points to be spent more like cash, which could simplify rewards for customers and encourage additional activity. DraftKings Loyalty Points Update
• Negative Sentiment: Investors continue to weigh governance concerns surrounding approval of a $30 million marketing contract for a cofounder’s startup shortly before his departure, raising questions about conflicts of interest and board oversight. DraftKings Cofounder Deal
• Negative Sentiment: Recent refinancing improved DraftKings’ liquidity through a $700 million term loan and a $750 million revolving facility, but the added debt keeps valuation, leverage and future interest costs in focus. DraftKings Refinancing and Valuation

Insider Activity at DraftKings

In other news, Director Jocelyn Moore sold 10,759 shares of the stock in a transaction that occurred on Wednesday, August 19th. The stock was sold at an average price of $24.05, for a total transaction of $258,753.95. Following the transaction, the director owned 1,881 shares in the company, valued at $45,238.05. This trade represents a 85.12% decrease in their position. The sale was disclosed in a filing with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider R Stanton Dodge sold 62,500 shares of the stock in a transaction that occurred on Thursday, June 11th. The shares were sold at an average price of $29.68, for a total value of $1,855,000.00. Following the transaction, the insider owned 556,258 shares in the company, valued at $16,509,737.44. This trade represents a 10.10% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 47.18% of the stock is currently owned by company insiders.

Institutional Trading of DraftKings

Hedge funds have recently bought and sold shares of the business. Viking Global Investors LP purchased a new position in DraftKings during the third quarter worth approximately $561,125,000. California State Teachers Retirement System boosted its stake in DraftKings by 1,727.3% during the second quarter. California State Teachers Retirement System now owns 12,924,304 shares of the company’s stock worth $326,468,000 after buying an additional 12,217,029 shares during the last quarter. Capital World Investors grew its holdings in DraftKings by 181.4% in the 4th quarter. Capital World Investors now owns 18,626,429 shares of the company’s stock valued at $641,867,000 after buying an additional 12,008,357 shares in the last quarter. Janus Henderson Group PLC increased its stake in shares of DraftKings by 50.8% in the 4th quarter. Janus Henderson Group PLC now owns 25,313,909 shares of the company’s stock worth $858,893,000 after acquiring an additional 8,524,923 shares during the last quarter. Finally, Norges Bank acquired a new stake in shares of DraftKings in the 4th quarter worth $284,466,000. Institutional investors and hedge funds own 37.70% of the company’s stock.

DraftKings Company Profile

DraftKings Inc is a leading digital sports entertainment and gaming company specializing in daily fantasy sports, sports betting and iGaming products. The company provides an integrated platform where users can participate in daily fantasy contests, place wagers on professional sports events, and enjoy a range of online casino-style games. DraftKings’ proprietary technology supports real-time odds, live scoring and advanced analytics to enhance the user experience across mobile and desktop applications.

Founded in 2012 by co-founders Jason Robins, Matthew Kalish and Paul Liberman, DraftKings began as a daily fantasy sports provider and rapidly expanded into regulated sports betting following legislative changes in the United States.