Entertainment
Is DraftKings (DKNG) the Best Entertainment Stock to Buy According to Analysts?
We recently compiled a list of the 10 Best Entertainment Stocks To Buy According to Analysts. In this article, we are going to take a look at where DraftKings Inc. (NASDAQ:DKNG) stands against the other best entertainment stocks to buy according to analysts.
According to a report by The Business Research Company, the international entertainment and media industry was valued at $2.51 trillion in 2023. It is expected to grow at a compound annual growth rate (CAGR) of 7% to reach $3.55 trillion by 2028. Growth in the entertainment industry is driven by the rapid adoption of subscription models, the evolution of live events, and the use of augmented and virtual reality technologies.
READ ALSO: 11 Best Aerospace and Defense Stocks to Buy Right Now and 11 Best Computer Hardware Stocks to Invest in Right Now.
A report published by FTI Delta earlier this year highlighted some significant trends and challenges in the media and entertainment industry. As per the report, the live entertainment sector has experienced a robust recovery, with global spending on live music in 2023 increasing by 49% compared to 2019. Major sports leagues, including the NFL, NBA, MLS, NHL, and IndyCar, have not only recovered but surpassed pre-pandemic attendance levels. The post-pandemic recovery within the industry has not been uniform. For instance, the filmed entertainment industry faced severe challenges in late 2023 due to strikes by the Writers Guild of America (WGA) and SAG-AFTRA. These disruptions led to a more than 70% decline in production and marketing expenditures, compounding existing issues from early 2023 when studios were already tightening budgets. As a result, spending in 2023 was down approximately 35% from 2022, reflecting a struggling market. The report anticipates recovery for filmed entertainment post-strike to be more subdued than previous rebounds, with projections of about 25% year-over-year growth in 2024.
On the bright side, the report highlighted a significant growth trajectory for United States TV and connected TV (CTV) advertising, emphasizing the transformative impact of CTV on the advertising landscape. The combined US TV and CTV ad spending is projected to approach $100 billion by 2027, with CTV being the primary driver of this growth. In 2024 alone, CTV advertising is expected to increase by $5.5 billion, representing a 22% year-over-year growth. The surge in CTV advertising is largely attributed to the rise of premium ad-supported streaming services.
In addition to a robust performance expected within the advertising segment, the gaming sector remains resilient. The video game industry achieved a CAGR of 9.2% from 2019 to 2022. Despite a 6.3% decline from the peak surge during the COVID-19 pandemic, console sales in 2022 remained 18% higher than pre-pandemic levels, indicating strong ongoing demand for gaming hardware. As per the report, the overall outlook for the video game market remains positive, with expectations of above mid-single-digit growth throughout the next year.
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