Is Draft Kings Stock a Solid Long Term Investment?

Draft Kings

When you think about different stocks that you can buy for the long-term, there are certain companies that almost immediately come to mind and others that might be more elusive. Chances are, Draft Kings would actually fall into the latter category. They have been performing exceptionally well as of late, yet they have never been one of those companies that seems like a mainstay for long-term stock options. In fact, many people felt like the company would fold and go bankrupt only a few months after it started. It’s been in operation for years now, but it still has that same stigma attached to it, at least as far as many people are concerned. The truth is, it might be a decent option for you if you can get past that stereotype. Here are some reasons why.

It‘s Popular

Draft Kings is hugely popular for one reason and one reason alone. The company is centered around the desire for people to not only bet on sports, but also that innate human desire to have fun. Even when the company was first developed and everyone expected them to fail, most of those individuals failed themselves. That failure was in their ability to understand that this company actually plays on the human senses. It’s the same reason that casinos in Las Vegas are so popular. Even though the landscape there is literally dotted with one casino after another, they’re all wildly successful. It comes down to the fact that people like to bet on things and they like to have a good time. Draft Kings allows individuals to bet on sporting events online, giving them the ability to enjoy all of these things without leaving the comfort of their own home. It’s no wonder that they’ve been so popular over the years. It’s also worth noting that they’ve been traded publicly on the stock market for some time now. According to stock market experts, the company is in a unique position to start making more money than they’ve ever made in the past. It’s true that their stock options have lost money recently. Like almost every other entertainment-based company, they took a real hit in 2020, largely because there weren’t that many events on which to bet that were taking place. As things got back into gear earlier this year, they continued to see their stock price going down. However, that doesn’t necessarily mean that there is cause for alarm. In fact, most experts claim that it actually means the company is poised to make a big rebound, one that they say could happen within the next several months.

Analysis of Stock

As it turns out, more than 25 analysts have looked at Draft Kings stock and they predict that over the course of the next 12 months, it will more than likely be worth more than it is today. While it is impossible to nail down an exact amount, most of the experts agree that the stock, which can be purchased at $70 per share today, might be worth over $100 per share sometime within the next 12 months. Of course, there is always a flip side to this type of thing. If the stock doesn’t perform well, they have estimated that it could drop to as little as $36 per share. That said, most of them also agree that if this should happen, it still represents a good stock option for the long term because it might be possible to simply hold on to the stock until it rebounds again. That isn’t always an option with every type of stock, but most of the analysts have enough confidence in this particular company that they believe it would be possible. Despite the fact that the stock has been on something of a downward trend lately, the overwhelming majority of stock market experts believe that it will definitely end up on an upward trend long before the next 12 months has come and gone. Obviously, purchasing shares of stock at $70 a piece and then trying to resell them at only $36 a piece would not be profitable. However, you could potentially make a decent profit if you were able to purchase them at the current $70 per share and then resell them for more than $100 each. Like anything else in the stock market, the goal is to buy the stock when it’s as affordable as possible and then wait for it to start going up, all so you can sell it when you think that the stock is either at or very near its highest point. With some of the more volatile companies that don’t have a solid history behind them, this is very difficult to do. In this case, it’s a bit easier to pull it off.

Progressive Growth

Another reason that this stock is often considered favorable for a long-term purchase is that it has seen progressive growth over the last several years. As a matter of fact, it’s been growing by leaps and bounds. In 2018, it grew by about 17% and the following year, it had grown by a little more than 49%. Despite the company’s financial challenges in 2020 (along with virtually every other company of this type), they still managed to see an astonishing 90% growth rate between 2019 and now. That is definitely something that’s worth taking note of and it’s one of the main reasons why most analysts consider it to be one of the safer choices available when it comes to a long-term stock option. When it’s all said and done, the only thing that is ever certain about the stock market is that nothing is ever certain. That said, you can still typically do fairly well if you pick solid performers that have a history of success. Draft Kings definitely fits into that category. As a result, it is one of the more favorable options for you if you’re considering long-term stock.

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