DraftKings (DKNG) experienced a significant surge in its stock price after reporting better-than-expected earnings. As a result, the sports betting giant became the IBD Stock of the Day and saw its stock price skyrocket by nearly 16.5%.
Shares of DraftKings reached a high of $33.75, surpassing multiple early entry points. The stock also crossed above the 50-day moving average and a trendline drawn from the August 4 peak. This provided an alternative entry point at $31.10. Additionally, DraftKings stock cleared a $32.65 entry and achieved its highest close since December 2021.
The relative strength line for DraftKings stock also reached a high, indicating a potential breakout. However, the stock is currently extended from the 50-day moving average and some of the early entry points. Ideally, shares would consolidate and form a handle before a breakout.
DraftKings has a Composite Rating of 77 out of 99, indicating strong technical indicators. The company also has an RS Rating of 97 out of 99, reflecting significant improvement compared to previous periods.
In terms of earnings, DraftKings reported third-quarter results that exceeded analysts’ expectations. The company narrowed its losses to 61 cents per share, while experiencing a 57% revenue gain to $790 million. Wall Street analysts praised DraftKings for its product execution, market share improvement, business initiatives, and expense discipline.
Looking ahead, DraftKings raised its revenue and adjusted EBITDA guidance for 2023. The company expects revenue to reach $3.695 billion and adjusted EBITDA to be negative $105 million. CEO Jason Robins attributed the positive outlook to the company’s momentum and investments in products and technology.
In addition to its strong financial performance, DraftKings also benefitted from the Taylor Swift-Travis Kelce craze. Bets on Kelce doubled after Swift went public with their relationship. Both FanDuel and DraftKings CEOs acknowledged the impact of celebrity relationships on betting trends.
Throughout the year, mutual funds have been increasingly investing in DraftKings stock, resulting in a 196% increase in its stock price. With its impressive earnings and positive outlook, DraftKings has become an attractive option for investors looking to capitalize on the growing sports betting market.
Disclaimer: The information provided is not real-time data and was captured as of 12:57PM EDT on 11/03/2023.