He acted based on anticipation of a strong fourth-quarter-earnings report next Friday.
His analysis of state gambling data indicates “solid upside” for revenue expectations, he wrote in a commentary.
The FactSet analyst consensus for 2021 revenue is $867.4 million. Kelly expects the company to raise its guidance from the range of $750 million to $850 million.
DraftKings recently traded at $59.78, up 2.6%. It more than tripled (up 237%) in the year through Thursday amid investor enthusiasm for online sports betting stocks.
As for the company’s fourth quarter, the analyst consensus calls for a loss of 43 cents a share on revenue of $232.7 million.
Investors underestimate DraftKings’ iGaming strength, Kelly said, according to MarketWatch.
The company may be able to produce more than $1 billion in the states where it currently operates. He notes that Virginia and Michigan came on line last month, The Fly reports.
ARK Next Generation is run by the prominent fund manager Cathie Wood. As of Feb. 1, the fund owned 620,300 shares of the Boston company, valued at nearly $34 million.
And in January, Goldman Sachs analyst Stephen Grambling upgraded the stock to buy from neutral, raising his price target to $65 a share from $45.