Online gambling became popular as casinos shut down during the pandemic, and since then these stocks have risen to prominence. However, recently these online gaming stocks have dropped off, and this could provide an interesting buying opportunity. DraftKings Inc. (NASDAQ: DKNG) is one of these stocks that pulled back over the past month, but one analyst thinks that it could jump nearly 25% from here.

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Cowen upgraded DraftKings to Outperform from Market Perform and issued a $70 price target, implying upside of 23.5% from the most recent closing price of $56.66.

According to the report, current legalization trends suggest that the second half of 2021 through the end of 2022 could result in DraftKings being live in states representing up to 51.2% of the adult population.

The report specifically detailed:

In Q1:21, we have seen state-by-state market concentration solidify around the top 4 operators where collective OSB handle share exceeded 90% in WV (99.7%), IN (92.5%), IA (92.9%), IL (98.3%), MI (90.6%), and VA (99.0%).

The stock dropped below the 50-day moving average ($62.53) at the beginning of April and has remained there since. The 200-day moving average ($50.73) has been supporting the stock for over a year.

Excluding Monday’s move, the DraftKings stock had outperformed the broad markets with a gain of about 21% year to date. In the past 52 weeks, the share price was up closer to 191%.

DraftKings stock traded about 2% to $57.85 on Monday, in a 52-week range of $19.95 to $74.38. The consensus price target is $73.50.

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