DraftKings (NASDAQ:DKNG) announced the acquisition of Jackpocket, a leading lottery app in the U.S., for $750 million. The acquisition will enable the online sports entertainment and gaming company to enter the fast-growing digital lottery vertical and expand its offerings by adding another differentiated product to its portfolio.
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The company plans to pay approximately $412.5 million in cash and the rest through its stock. The transaction is expected to close by the second half of 2024.
Jackpocket to Support DKNG’s Financials
In addition to providing entry into the high-growth lottery industry, Jackpocket will strengthen DKNG’s position in Sportsbook and iGaming verticals, driven by its cross-sell capabilities and efficient customer acquisition engine.
DraftKings expects the acquisition to generate $260 million to $340 million in incremental revenue and $60 million to $100 million in incremental adjusted EBITDA for Fiscal 2026. Further, it will likely add $260 million to $340 million in incremental revenue for Fiscal 2028 and generate incremental adjusted EBITDA between $100 million and $150 million for Fiscal 2028.
What is the Forecast for DraftKings Stock?
DraftKings stock is down about 3% in Thursday’s after-hours trading following mixed Q4 results. However, it has gained nearly 150% in one year. Despite this notable increase in its share price, Wall Street maintains a bullish outlook. With 21 Buy, one Hold, and one Sell recommendations, DKNG stock has a Strong Buy consensus rating.
Analysts’ average price target of $44.64 is roughly in line with its closing price on Thursday, February 16.
