Wall Street Analysts Confident In Barstool Sportsbook

After the ‘soft-launch’ of the Barstool Sportsbook app, Wall Street analysts remain positive about the sportsbook prospects created by Penn National and Barstool Sports appeared to get off to a good start.

Penn announced that after receiving approval from the Pennsylvania Gaming Control Board, it will conduct a live, real money testing period for the new sportsbook.

The app was released on Friday 17 September in Pennsylvania, just in time to catch a weekend filled with NBA, NCAA football, NFL, and US Open play, joining, among others, the likes of BetRivers, DraftKings and FanDuel.

Sensor Tower data has shown that in its first weekend, the Barstool Sportsbook app had 63,000 downloads, peaking with 23,000 downloads on Saturday.

Bank of America analyst Shaun Kelley in a note to clients, said: “Although data is limited, initial metrics are encouraging, as it was the #1 sports betting and overall sports app in the App Store for much of the weekend.

“Our initial impressions are positive given the app’s ease of use and leverage of the Barstool brand to create a unique interactive experience. We think the app targets more of a casual bettor than competitors.”

With a 29 percent gain on last month, Penn National kicked off this week, but this has decreased marginally today as investors remain hesitant about another outbreak of coronavirus cases. Kelley, however, reported by Casino.com, remains optimistic in his bullish strategy, forecasting $85 shares, a tie on Wall Street for the highest estimate.

Kelley said: “While the stock has had an amazing run, we still like PENN, given its attractive exposure to sports betting/iGaming and an improving core business. Penn’s ability to drive conversion from downloads to deposits and deposits to bets/revenue is the next critical step.”

Analysts say that Penn may be well on its way to gaining the 23 percent needed to get to $85, especially if in the near future the app is rolled out across other states.

“Factor in PENN’s leverage, small size, retail base, momentum, and short interest, and it is easier for us to see additional upside. We raise our PO to about 12x EV/EBITDA on 2022E, which on a sum of the parts, implies approximately 8.5x revenue on sports betting/iGaming,” concluded Kelley.