Just two months ago, we excitedly updated our DrafktKings ($DKNG) price target to reflect their potential to forge a more aggressive growth path.
But now, DraftKings has already blown past that figure by posting a truly paradigm-shifting investor day last week. We projected DKNG was going to leverage a stronger product to stay on top of the Sports Betting and iGaming markets, but DraftKings is about to go much farther than that.
DraftKings just unveiled revenue guidance that convincingly projects that their TAM has grown 54% YoY! Interest in Online Sports Betting is exploding as DKNG and their rivals dump mountains of capital into marketing the new world of digital gambling.
This would be wild enough on its own. Online Sports Betting already could be a $20 billion market by the end of the year. But this 54% TAM growth is being projected in states where sports gambling is currently legal.
That's what left our jaws on the floor. DraftKings has established a massively dominant position in the space and posted strong enough guidance to rush past our price target, and that's with them heavily discounting growth coming from a few huge state-level legalizations that are coming soon.
With this and the highly-touted ESPN Bet launch last week, there have been some seismic shifts in the Online Sports Betting industry. But after digging deep into the numbers, our analysts are now confident that this is still DraftKings' game to lose.
So, let's look at where DKNG is right now, how their new products announced at Investor Day will boost margins, and how new states will keep DraftKings winning more and more as we push through 2024.
Product is the clear king in this space, and DraftKings is an undisputable master of product that is going to only add to their dominance while their rivals continue to develop the market for them. Let's dive into it.👇