DraftKings Stock Falls More Than 10% on News of Hacking that Wiped User Accounts

DraftKings Stock (DKNG:NSD) Analysis:

Last Closing Price: $14.69

Consensus Rating: Strong Buy

12-Month Price Target: $22.47

Market CAP: $6.76 Billion

 

DraftKings stock (DKNG:NSD) shares plunged in midmorning trade on Monday after The Action Network reported that user accounts had been stolen.

According to the news source, a number of customers were subjected to large withdrawals and locked out of their accounts after hackers altered login credentials. The corporation reported an account issue via its customer service Twitter account on Sunday evening.

The tweet stated, “We are aware of reports of consumers experiencing troubles with their accounts and are conducting an investigation.” Please contact the Customer Experience Team at support@draftkings.com if any of your accounts are experiencing problems.

A number of customers responded angrily to the tweet, echoing the report’s findings.

“I sent many messages to the “24/7″ support team as my money was being taken,” stated one response. “Could have been easily prevented in real time as I quickly recognized the fraud, but nobody was present on the two busiest sports betting days of the week.”

The company informed that the DraftKing website was not hacked, but that users’ login information had been obtained via other websites where the same credentials were used.

Paul Liberman, co-founder and president of global technology and product, said in a statement, “We have seen no evidence that DraftKings’ systems were accessed in order to obtain this information.” We have detected fewer than $300,000 in affected consumer cash, and we intend to compensate all affected customers.

Shortly after the release of the report, shares of the Boston-based online gambling company (Draftkings Stock) plummeted 10.23%, but losses reduced to approximately 5% by the afternoon.

Analysts rate DraftKings Inc. (DKNG:NSD) with a Strong Buy rating and a $23 target

BNP Paribas rates DraftKings Stock Forecast as Underperform.

Based on the DraftKings Stock Forecast from 18 analysts, the average analyst DKNG stock price target is USD 23.92 over the next 12 months. DraftKings Inc’s average analyst rating is Strong Buy. Stock Target Advisor’s own stock analysis of DraftKings stock forecast is Bearish, which is based on 1 positive signals and 7 negative signals. At the last closing, DraftKings Inc’s stock price was USD 14.28DraftKings Inc’s stock price has changed by -1.12% over the past week, -3.35% over the past month and -70.79% over the last year.

 

About DraftKings Inc. (DKNG:NSD):

DraftKings Inc. operates a digital sports entertainment and gaming company. It offers multi-channel sports betting and gaming technologies, powering sports and gaming entertainment for operators in 17 countries. The company operates iGaming through its DraftKings brand in 5 states, as well as operates Golden Nugget Online Gaming, an iGaming product and gaming brand in 3 states. DraftKings Inc. was founded in 2011 and is headquartered in Boston, Massachusetts.

 

What we like:

High market capitalization

This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

 

What we don’t like:

High volatility

The total returns for DKNG stock price are volatile and above median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Below median dividend returns

The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

Overpriced compared to earnings

DKNG stock price is trading high compared to its peers on a price to earning basis and is above the sector median.

Overpriced compared to book value

DKNG stock price is trading high compared to its peers median on a price to book value basis.

Highly leveraged

The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the stock forecast and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.

Negative cashflow

The company had negative total cash flow in the most recent four quarters.

Negative free cash flow

DKNG stock price had negative total free cash flow in the most recent four quarters.

Analysts rate DraftKings Inc. (DKNG:NSD) with a Strong Buy rating and a $23 target

BNP Paribas initiated DraftKings Stock with an Underperform rating.

Based on the DraftKings Stock Forecast from 18 analysts, the average analyst DKNG price target is USD 23.92 over the next 12 months. DraftKings Inc’s average analyst rating is Strong Buy. Stock Target Advisor’s own stock analysis of DraftKings stock forecast is Bearish, which is based on 1 positive signal and 7 negative signals. At the last closing, DraftKings stock price was USD 16.04DraftKings stock price has changed by +0.71% over the past week, +0.36% over the past month and -67.51% over the last year.

 

About DraftKings Inc. (DKNG:NSD):

DraftKings Inc. operates a digital sports entertainment and gaming company. It offers multi-channel sports betting and gaming technologies, powering sports and gaming entertainment for operators in 17 countries. The company operates iGaming through its DraftKings brand in 5 states, as well as operates Golden Nugget Online Gaming, an iGaming product and gaming brand in 3 states. Its Sportsbook is live with mobile and/or retail betting operations in the United States pursuant to regulations in 18 states. DraftKings Inc. was founded in 2011 and is headquartered in Boston, Massachusetts.

 

What we like:

High market capitalization

DraftKings stock is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

 

What we don’t like:

High volatility:

The total returns for DraftKings stock are volatile and above median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Below median dividend returns:

The average income yield of DraftKings stock over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

Overpriced compared to earnings:

DKNG price target is trading high compared to its peers on a price to earning basis and is above the sector median.

Overpriced compared to book value:

DKNG price target is trading high compared to its peers median on a price to book value basis.

Highly leveraged:

The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the market news and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively.

Negative cashflow:

DraftKings stock had negative total cash flow in the most recent four quarters.

Negative free cash flow:

DraftKings stock had negative total free cash flow in the most recent four quarters.