DraftKings Target of Unusually High Options Trading (NASDAQ:DKNG)

DraftKings Inc. (NASDAQ:DKNG) was the recipient of unusually large options trading activity on Thursday. Stock investors bought 126,727 call options on the stock. This is an increase of 210% compared to the average volume of 40,842 call options.

Key Headlines Impacting DraftKings

Here are the key news stories impacting DraftKings this week:

• Positive Sentiment: DraftKings reported rapid growth on its prediction-markets platform, with annualized consumer volume reaching $1.3 billion and total volume climbing to $3.1 billion, fueling optimism about a new growth engine. DraftKings Sees $1.3 Billion in Prediction Market Trading. The Stock Is Soaring.
• Positive Sentiment: Retail traders and options activity accelerated after the update, with call buying signaling expectations for more upside if prediction-market momentum continues. Call Traders Target DraftKings Stock Amid Strong Volume Growth
• Positive Sentiment: UBS reiterated a Buy rating on DraftKings, reinforcing the view that Wall Street is becoming more constructive on the company’s growth outlook. UBS Remains a Buy on DraftKings (DKNG)
• Neutral Sentiment: DraftKings CEO Jason Robins is scheduled to participate in an upcoming investor conference, which could provide more color on strategy but is not itself a major catalyst. DraftKings Announces Jason Robins’ Participation in Upcoming Event
• Neutral Sentiment: DraftKings also had a short-interest filing showing no meaningful short base, which does not appear to be a major driver of the move.

Analyst Upgrades and Downgrades

Several brokerages have commented on DKNG. TD Cowen reissued a “buy” rating and set a $30.00 price target on shares of DraftKings in a research report on Monday. BMO Capital Markets boosted their price target on shares of DraftKings from $42.00 to $50.00 and gave the stock an “outperform” rating in a research report on Tuesday, March 3rd. Mizuho boosted their price target on shares of DraftKings from $44.00 to $45.00 and gave the stock an “outperform” rating in a research report on Tuesday, May 12th. Morgan Stanley reaffirmed an “overweight” rating on shares of DraftKings in a report on Thursday, May 21st. Finally, BTIG Research upped their target price on shares of DraftKings from $28.00 to $30.00 and gave the company a “buy” rating in a report on Friday, May 8th. One research analyst has rated the stock with a Strong Buy rating, twenty-nine have issued a Buy rating, eight have assigned a Hold rating and two have given a Sell rating to the stock. According to MarketBeat.com, DraftKings presently has a consensus rating of “Moderate Buy” and a consensus target price of $34.21.

DraftKings Stock Up 4.3%

Shares of DKNG stock opened at $28.79 on Thursday. The company has a debt-to-equity ratio of 3.03, a quick ratio of 1.02 and a current ratio of 1.02. The firm’s 50-day moving average is $24.17 and its 200-day moving average is $27.56. The stock has a market cap of $14.28 billion, a price-to-earnings ratio of 479.83 and a beta of 1.66. DraftKings has a 52-week low of $20.46 and a 52-week high of $48.78.

DraftKings (NASDAQ:DKNG) last issued its earnings results on Friday, May 8th. The company reported $0.20 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.22 by ($0.02). The firm had revenue of $1.65 billion during the quarter, compared to the consensus estimate of $1.63 billion. DraftKings had a net margin of 0.93% and a return on equity of 13.51%. The firm’s revenue for the quarter was up 16.8% compared to the same quarter last year. During the same period in the previous year, the company posted ($0.07) earnings per share. Sell-side analysts predict that DraftKings will post 0.6 EPS for the current year.

Insider Activity

In other DraftKings news, Director Woodrow Levin sold 34,234 shares of the business’s stock in a transaction dated Monday, May 18th. The shares were sold at an average price of $25.71, for a total transaction of $880,156.14. Following the sale, the director directly owned 29,820 shares of the company’s stock, valued at $766,672.20. The trade was a 53.45% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through this link. Also, Director Jocelyn Moore sold 2,150 shares of the business’s stock in a transaction dated Friday, March 13th. The stock was sold at an average price of $25.60, for a total transaction of $55,040.00. Following the sale, the director directly owned 1,406 shares in the company, valued at $35,993.60. This trade represents a 60.46% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold a total of 37,246 shares of company stock worth $957,031 over the last three months. Insiders own 47.18% of the company’s stock.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently bought and sold shares of DKNG. Dagco Inc. acquired a new position in DraftKings in the 4th quarter valued at about $26,000. Ascentis Independent Advisors acquired a new position in DraftKings in the 1st quarter valued at about $27,000. Ameriflex Group Inc. grew its stake in DraftKings by 100.0% in the 3rd quarter. Ameriflex Group Inc. now owns 810 shares of the company’s stock valued at $30,000 after buying an additional 405 shares during the last quarter. Asset Dedication LLC acquired a new position in shares of DraftKings during the 3rd quarter worth approximately $37,000. Finally, Montag A & Associates Inc. grew its position in shares of DraftKings by 82.5% during the 4th quarter. Montag A & Associates Inc. now owns 1,106 shares of the company’s stock worth $38,000 after purchasing an additional 500 shares in the last quarter. Institutional investors and hedge funds own 37.70% of the company’s stock.

About DraftKings

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.