DraftKings Initiated at Buy by Mizuho; 24% Upside Seen on Market Share Gains and Improving Profitability

• Mizuho Securities initiates coverage of DraftKings stock with $58 price target and "buy" rating, sees 24% upside • DraftKings has over 30% market share of North American online sports betting, allowing customer growth without raising marketing spend • Lower marketing costs as percentage of revenue driving improved profitability, with narrowed Q4 net loss and positive free cash flow guidance for 2024 • Can leverage in-house games and content development to grow profits without paying fees to third parties • DraftKings has long growth runway in online gaming/sports betting markets, though trades at expensive valuation currently