2 Gambling Stocks That Could Be Your Best Bet Right Now – TheStreet

Online sports betting is a relatively new market. U.S. states began legalizing the activity only a few years ago.

And with a projected compound annual growth rate (CAGR) of 11.4% by 2028, online gambling stocks offer investors a huge growth opportunity.

It should come as no surprise that the COVID-19 pandemic positively impacted the online sports betting market. After all, what else were you supposed to do when you ran out of sourdough recipes to make?

The Roundhill Sports Betting & iGaming ETF (BETZ) , which tracks the performance of online gambling stocks, has risen nearly 47% since it launched in the early innings of the COVID-19 pandemic.

Take a look:

Figure 1: BETZ performance since June 2020.

Google Finance

However, since July 2021, gambling stocks have taken a hit. BETZ is down 2% year-to-date and dropped 21% in late October.

This means investors interested in these sin stocks might want to get in now, on the dip.

But which sports gambling stocks are the best? Weve identified two that we believe could be your best bets right now.

(Read more from Wall Street Memes: Fiscal Q3 Earnings Live Blog: Will GameStop Stock Rebound?)

Genius Sports (GENI) is a $1.9 billion market cap company that collects and processes data from sports events and sells it to gambling companies like Skillz and DraftKings. Genius is an official data partner of the NFL and has also inked deals with NASCAR, MLB, NBA, and other sports organizations.

Like several other tech stocks, Genius went public this year through a special purpose acquisition company (SPAC), dMY Technology Group. Its initial share price was $21.60.

Since then, GENI has lost 58%. Currently, the stock is priced at an all-time low just north of $8 per share.

However, the stock is backed by Cathie Woods Ark Invest, which has seen plenty of growth opportunities in online sports betting since it first became legalized in the U.S

Figure 2: Cathie Wood's ARK Invest currently owns nearly 3% of GENI's float.

CNBC

Ark regards Genius Sports as part of the backbone of regulated sports betting. The fund initially bought 280,000 shares for its Ark Next Generation Internet ETF (ARKW) - Get ARK Next Generation Internet ETF Reportin August 2021 and has kept buying more as the stock has dipped. Today, the fund owns 5.6 million shares.

Wall Street analysts are very bullish on GENI stock, especially at its current all-time low. Based on six analysts, the stock has a strong Buy rating and a $20 price target. That would imply a whopping 140% upside potential.

DraftKings (DKNG) - Get Draftkings, Inc. (DKNG) Reportis an online sports betting and iGaming company currently valued at $13 billion. DraftKingss CEO, Jason Robins, recently tweeted about his companys valuation story:

DraftKings is one of the biggest players in the online sports betting market. As new states have made online betting legal, its business has expanded.

Its top-rated app which offers innovative features and functionalities has been increasingly popular with gamers.

However, by investing heavily in growth initiatives, DraftKings naturally loses some of its profitability. The company has failed to beat earnings-per-share (EPS) estimates since it went public in April 2020.

And for the past quarter, it missed both EPS and revenues estimates. This sent DKNG plummeting 26% to a 52-week low. Currently, the stock is down 50% from its all-time high in late March.

However, Wall Street analysts are bullish on DKNG as a moderate Buy. Based on 19 analysts, its price target is $61, which implies a whopping 95% upside potential.

(Read more from the Wall Street Memes: After its Recent Drop, Whats Next for AMC Stock?)

(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)

Read more here:

2 Gambling Stocks That Could Be Your Best Bet Right Now - TheStreet