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SportsTranscript
00:00 (upbeat music)
00:03 - DraftKings, at least for the people
00:05 who are making these predictions are saying
00:08 that there could be some future profitability
00:12 in their stock.
00:13 I'm always careful about using the possibility
00:17 as opposed to a guarantee
00:18 'cause it's just like anything else.
00:21 - Yeah, and let's be clear, don't listen to me
00:24 and don't buy just because an analyst says to, right?
00:26 You have to, you know, when you get into the stock market
00:29 you gotta do your due diligence
00:30 and make sure you know what's going on.
00:32 But yeah, these big banks right now,
00:34 they're behind DraftKings.
00:36 According to NASDAQ, the 26 analysts,
00:39 it all averages out to a strong buy for DraftKings.
00:42 And Jeffrey Stanchel of Stifel came out
00:45 and said the same thing.
00:46 He upgraded to buy from hold.
00:49 And he said, look, there are a couple of negatives
00:50 coming up for DraftKings, right?
00:52 Like we have been watching the state reports come out
00:55 for November and seeing that these states
00:59 and these operators just got crushed in November
01:02 on low hold, you know, the betters really took it to them
01:05 in November and that could lead to a significant EBITDA drop
01:09 for these guys.
01:10 And Stanchel said it could mean even missing, you know,
01:13 the midpoint of their guidance by like 75 million,
01:15 which is significant when you talk about
01:18 a DraftKings company that has come
01:20 and they've raised their guidance every quarter
01:23 and they've really been showing what they can do
01:26 to make money.
01:28 And that has mainly been one, stop advertising so much
01:32 and focus on retention.
01:33 And two, make their product better through parlays
01:37 and really get a, not just a, you know,
01:40 a lucky hold here or there,
01:42 but really build in some structural hold improvements.
01:45 And so that's what Stanchel sees now as coming up.
01:49 And look, we have Flutter, the parent company of Fandul,
01:53 also getting ready to list in the US.
01:56 They're gonna go live, should be January 29th next week.
01:59 So there's going to be some of that attention
02:03 taken away from DraftKings,
02:04 potentially some of that market volume
02:06 taken away from DraftKings.
02:07 And the other thing that he says, look,
02:09 we have to watch what these tier two operators are doing,
02:13 ESPN, Fanatics, BetMGM, Bet365.
02:17 If those guys are gonna continue to spend
02:19 and not just in customer acquisition,
02:21 but spend on product, which we find out
02:24 is really what's winning the day at the end of the day.
02:27 If they continue to improve their product,
02:29 then we could see a little bit of a shaky pedestal
02:34 for Fandul and DraftKings as those one and two.
02:38 You know, they could start to lose some of that share
02:41 in the market.
02:42 But when he's looking at DraftKings now,
02:44 this is really a totally different company
02:47 from the company that went public in April, 2020.
02:51 DraftKings now has their older states growing
02:55 and essentially covering business operations,
02:59 they said at one point.
03:00 And the new states,
03:01 they know that they don't have to go in
03:02 and spend as much as they did,
03:05 because again, it's not necessarily
03:07 who comes out with the flashiest offer,
03:09 it's who can offer the best product.
03:11 And so I think the market is really starting to shift
03:15 on what it thinks about DraftKings.
03:17 Obviously, it's easy to say that, right?
03:19 When a company finally starts to show profit
03:22 instead of losing hundreds of millions of dollars a year.
03:26 It's, you know, big shocker that analysts like that
03:29 and investors want to see that, right?
03:31 But yeah, DraftKings is gonna be a stock to watch this year.
03:34 And right now, Stanislav just said
03:36 there's a lot of upside in the price
03:38 to where he thinks it's gonna go,
03:39 a $45 a year end price target.
03:42 And, you know, we'll see.
03:44 But DraftKings, their operations, their bottom line,
03:47 huge story for this year.
03:49 (upbeat music)
03:52 (bells chiming)