DraftKings (NASDAQ:DKNG) provides digital sports entertainment and gaming through daily sports, sports betting, and iGaming opportunities. I am bullish on DKNG stock.
This year has, so far, been a roller-coaster ride for DraftKing's investors. The price action of the stock might have made some people seasick. (See DKNG stock charts on TipRanks)
Some folks are concerned that the iGaming craze might be fading, as the world recovers from the COVID-19 pandemic. Admittedly, this could prove to be a headwind to DraftKings' business model.
Fortunately, a recent development highlights DraftKings' exciting foray into a buzz-worthy, tech-infused market.
A Quick Look at DKNG Stock
This year started off with a bang for DKNG stockholders. The share price ran fast and hard, from $45 to $75 in just a couple of months.
However, that $75 level turned out to be a fierce resistance point, as the bulls were rejected there several times in March.
DKNG stock collapsed after that, tumbling all the way down to $41 in mid-May, before recovering to the $60 area later in August.
There is likely to be a battleground between the buyers and sellers at $75 for a while. Breaking above this level will be crucial, especially if it happens with elevated trading volume.
At the same time, the bulls will want to see DraftKings' trailing 12-month earnings per share turn positive soon. Currently, that number stands at a loss per share of $3.34.
Jumping into the NFT Ecosystem
If you believe in the future of non-fungible tokens or NFTs, then you should be glad to know that DraftKings is making a serious move into this future-facing market.
Plus, the company is adding a sports angle to NFTs, which could help ramp up interest in these collectible items.
Reportedly, an NFT ecosystem called DraftKings Marketplace went live with its first Preseason Access Collection.
The exclusive content for this debut was to be provided by Autograph. It featured NFTs in the form of Preseason Access Passes from top athletes, including Tom Brady, Wayne Gretzky, Tony Hawk, Naomi Osaka, Derek Jeter, and Tiger Woods.
These are truly tech-enhanced collectibles. In fact, the NFTs are minted on a Ethereum Layer 2 solution, which the customers can then store within their DraftKings Marketplace portfolios.
Great Potential for Returns
Of course, there's no guarantee that the company's venture into NFTs will provide strong returns.
Yet, NFTs represent a vast addressable market right now, so the profit potential is definitely there.
“The overall NFT market has already surged to over $2.5 billion in sales volume for the first half of 2021," DraftKings president and co-founder Matt Kalish explained.
Wall Street Weighs In
According to TipRanks’ analyst rating consensus, DraftKings is a Moderate Buy, based on nine Buy and four Hold ratings. The average DKNG price target is $70.17, implying 18.4% upside potential.
The Takeaway
Hopefully, the price action in DKNG stock hasn't made you shy.
Granted, DraftKings investors could definitely use some positive news. Could the company's foray into the sports-related NFT market provide a catalyst?
The market opportunity is there, and it's potentially quite lucrative. So, DraftKings seems to be on the cusp of a breakthrough with its bold venture into NFTs.
Disclosure: At the time of publication, David Moadel did not have a position in any of the securities mentioned in this article.
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