DraftKings (DKNG) has emerged as the IBD Stock of the Day after experiencing a surge in its stock price following an earnings beat-and-raise report. The sports betting giant’s stock jumped over 16% and surpassed multiple early entries, indicating a bullish signal. Furthermore, DraftKings stock crossed key entry points and achieved its best close since December 2021. The company’s strong relative strength line also suggests potential for a breakout. However, it is worth noting that the stock is currently extended from its 50-day moving average and early entries, so a period of consolidation may be desired before a breakout.
DraftKings reported impressive earnings for the third quarter, exceeding expectations in terms of revenue growth, user growth, and narrowing losses. The company has been consistently reducing its year-over-year losses each quarter since Q2 2022, and analysts anticipate the company’s first annual profit by 2025. DraftKings has also demonstrated its commitment to product innovation and technology investment, aiming to become a fully integrated mobile sports betting operator. As a result, the company raised its revenue guidance for 2023 and initiated strong revenue guidance for fiscal year 2024, surpassing analyst consensus.
The surge in gaming stocks, including DraftKings, can also be attributed to the recent popularity of Taylor Swift and Travis Kelce. FanDuel CEO Amy Howe revealed that bets on Kelce doubled after Swift and Kelce went public with their romance. Moreover, mutual funds have been increasingly investing in DraftKings stock this year, driving its significant growth. Overall, DraftKings’ strong performance, positive earnings report, and industry momentum contribute to its position as the IBD Stock of the Day.
