The Boston company is "one of the leading beneficiaries as online sports betting and gambling take off in the U.S. - an opportunity we size between $42 [billion] and $58 billion annually longer term," said Needham analyst Brad Erickson.
Online sports betting has taken off in the U.S. after the Supreme Court struck down a 1992 federal law banning sports betting at the federal level. A number of states have enacted sports-betting legislation.
"We expect the regulatory tailwind to persist and believe online providers' access to data creates a structurally better user experience vs. brick and mortar," Erickson said.
For DraftKings specifically, Needham's analyst sees its "datacentric approach to customer acquisition" as a catalyst that will help the company "regularly exceed top-line forecasts."
DraftKings shares have more than quintupled so far in 2020. They are trading at six times their 52-week low below $10, set late last October. At last check they were 3.4% higher at $60.82.
Separately on Thursday, the NFL's Philadelphia Eagles unveiled a multiyear deal with DraftKings that makes the company the team's official sports-betting partner.
In the deal DraftKings will receive naming rights to a field club at the Eagles' stadium, Lincoln Financial Field.
DraftKings' branding will also be placed on Eagles social-media channels, practice livestreams, in-game branding, videoboards and signage at Lincoln Financial Field.
Terms of the agreement weren't disclosed.