Needham reiterates Buy rating on DraftKings stock, maintains $60 price target

Investing.com - Needham has reiterated its Buy rating on DraftKings Inc. (NASDAQ:DKNG) with a price target of $60.00, aligning with broader market optimism as the stock has delivered a strong 48% return over the past year and currently trades near its 52-week high of $53.61.

The firm maintained its positive outlook on the online sports betting company despite DraftKings facing headwinds from higher taxes and its launch in Missouri.

Needham noted that DraftKings was able to maintain its adjusted EBITDA guidance for the quarter, helped by favorable sport outcomes that offset the challenges.

The research firm expressed confidence in the stock’s risk-reward profile, highlighting expectations for a 25% to 30% adjusted EBITDA compound annual growth rate (CAGR) in 2025.

Needham also pointed out that DraftKings has demonstrated an ability to navigate unforeseen challenges, with the firm’s estimates tracking ahead of the company’s 2026 and 2028 targets that were provided at an investor day nearly two years ago.

In other recent news, DraftKings Inc. reported its second-quarter 2025 earnings, significantly surpassing expectations with an earnings per share of $0.38, compared to the forecasted $0.13. The company’s revenue reached $1.51 billion, exceeding the anticipated $1.4 billion. Goldman Sachs responded by raising its price target for DraftKings to $61.00, maintaining a Buy rating, citing strong Q2 revenue and adjusted EBITDA results that surpassed both Goldman Sachs estimates and company guidance. Stifel also maintained a Buy rating with a $51.00 price target, despite acknowledging tax and regulatory challenges. DraftKings’ Q2 adjusted EBITDA exceeded expectations by 24%, attributed to favorable sporting outcomes and core business improvements. However, the company reiterated its full-year 2025 guidance, noting factors such as Missouri launch costs and tax increases in Illinois, Louisiana, and New Jersey. These developments highlight the company’s robust performance amidst emerging challenges.

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