DraftKings maintains bullishness after upgraded results as attention shifts to key level

DraftKings Inc. (NASDAQ:DKNG) rose 6% in premarket on Friday after positive stock market news. The stock was boosted by a reported $790 million or £639.9 million revenue in Q3 2023. The revenue exceeded estimates of $706.8 or £572.5 million. DraftKings narrowed its net loss to $283.1 or £229.3 million from $450.5 or £364.9 million last year.

DraftKings attributed the robust quarter to expansions into new regions and increased customer engagement. In the quarter, the company reported 2.3 million monthly unique payers. The number is a 40% increase from the previous year. The average revenue per monthly unique payer rose by 14%.

DraftKings anticipates a higher revenue of between $3.67 or £2.97 billion and $3.72 or £3.01 billion in FY23. The revenue increases from its previous guidance of between $3.46 or £2.8 billion and $3.54 or £2.87 billion. In FY24, DraftKings projects a revenue of between $4.50 or £3.65 billion and $4.80 or £3.88 billion.

Meanwhile, analysts have been upbeat on DraftKings stock. Over the past week, Robert Fishman, an analyst with MoffettNathanson, upgraded the stock from neutral to buy. The analyst gave the stock a price target of $37 from $31. The analyst cited narrowing expenses and rising revenues, projecting a positive EBITDA by 2025. 

JPMorgan analysts gave the stock an overweight target of $36 from a neutral rating of $26. JPMorgan analyst Joseph Greff cited an “appealing” gambling sector and new market growth prospects. Greff also believes DraftKings’s “strong moat” could allow it to compete with names like ESPN Bet.

DraftKings technical outlook – $32 is a key resistance level to watch

Despite the robust quarter and stock ratings, DraftKings has to overcome a key resistance around $32. The level has kept bulls away, and any potential breakout could see more buyers for the stock.

A technical outlook shows DraftKings on an upward move, approaching the $32 resistance. The stock has recovered above the 50-day after the quarter results.

Should you buy DraftKings stock?

DraftKings is on a strong bullish momentum that could continue due to the financial results and upgrades. The stock could rise above $32 and hit the targets set by analysts.

However, investors looking to buy DKNG should wait for clearance of the $32 key level. The level is a key resistance that could hold the price back.