DraftKings (NASDAQ: DKNG) stock price has been in a strong bullish break out as investors wait patiently for the upcoming earnings. The shares rose to a high of $21 on Tuesday, the highest point since February 21st. This price is close to March 2022 highs, meaning it has jumped by more than 100% from the lowest level in 2022.
DraftKings earnings estimates
DraftKings share price has made a strong recovery in the past few months. Most of these gains are mostly because of the strong performance of technology companies as hopes of a Fed pivot rise. Most analysts believe that the Federal Reserve will stop hiking rates later this year. This explains why the Nasdaq 100 index has outperformed the Dow Jones.
DraftKings stock has also jumped as investors anticipate strong results when the firm publishes its results on May 4. Analysts expect that the company’s revenue in Q1 jumped to $683.95 million from over $417 million in the same quarter in 2022. Its loss per share is expected to move from $1.14 to 72 cents. Historically, DraftKings has done better than estimates.
Another reason is that investors anticipate the sports betting industry will continue growing this year. A recent report by Insider Intelligence showed that its market size will grow by 455 to over $136.6 billion. It also estimated that the industry will hit $200 billion in 2024, which is remarkable considering that it generated over $4.62 billion five years ago.
This growth is mostly because many states have now legalized sports betting, which will benefit companies like DraftKings, BetMGM, and Fanduel. As shown below, DraftKings has more room to grow in the United States.
For DraftKings, annual revenue jumped from $191 million in 2017 to over $2.24 billion in 2022. While its net loss has widened, the company hopes to be profitable in 2024 or 2025.
DraftKings stock price forecast
DKNG chart by TradingView
The daily chart shows that the DKNG share price has been bullish in the past few months. A closer look shows that it is nearing the important resistance at $21.51, where it has struggled to move above on February 21st and August 15. It is also approaching the 23.6% Fibonacci Retracement level.
Most importantly, the DraftKings share price has formed a golden cross pattern, which is a bullish pattern. A golden cross happens when the 200-day and 50-day moving averages make a crossover. Therefore, there is a likelihood that the shares will rise to the 50% retracement level at $37.17. This price is ~80% above the current level.
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