DraftKings vs. Dolphin Entertainment: Which NFT to Choose?

Investors are showing a keen interest in Non-Fungible Token (NFT) stocks. NFTs are digital assets like art, music, or videos that are created using blockchain technology. Each NFT has a Read More... The post DraftKings vs. Dolphin Entertainment: Which NFT to Choose? appeared first on TipRanks Financial Blog.

DraftKings vs. Dolphin Entertainment: Which NFT to Choose?

Investors are showing a keen interest in Non-Fungible Token (NFT) stocks. NFTs are digital assets like art, music, or videos that are created using blockchain technology. Each NFT has a unique digital signature that makes it difficult for NFTs to be exchanged for one another, and no two NFTs can be equal.

NFTs offer content creators a unique way to monetize their content through royalty payments or by selling their art directly to consumers. According to an Al Jazeera report from last month, this year the market for NFTs has surged with $2.5 billion in sales so far, in contrast to sales of just $13.7 million in the first half of last year.

Using the TipRanks Stock Comparison tool, let us compare two companies who have ventured into NFTs, DraftKings and Dolphin Entertainment, and see how Wall Street analysts feel about these stocks.

DraftKings (NASDAQ: DKNG)

DraftKings is an online sports gaming and entertainment company that provides its users with a sports betting Sportsbook, daily fantasy sports, and online casino gaming opportunities. DKNG is expected to announce its Q2 results on August 6.

Late last month, DKNG announced its plans to launch DraftKings Marketplace, an ecosystem of digital collectibles that would offer curated NFT drops and support secondary-market transactions. The company has also entered into a strategic relationship with Autograph, an NFT platform. As a result, the DraftKings Marketplace will also be the exclusive distributor of NFT content from Autograph.

Autograph is an NFT platform that lists its co-founders as football legend Tom Brady, and has other sports stars like Tiger Woods and Naomi Osaka on its advisory board. (See DraftKings stock chart on TipRanks)

DraftKings co-founder and president Matt Kalish said, “DraftKings Marketplace will sit at the center of this technological and cultural phenomenon, providing our immense existing customer base with an easily accessible experience that rivals all legacy marketplaces. This initial vision in collaboration with Autograph, and its coveted collection of official digital collectibles, is a vital first step as we enter the emergent NFT market.”

Initially, DKNG’s marketplace “will be the exclusive purveyor of sports NFTs from Autograph, the collaboration may eventually branch into other verticals like entertainment, lifestyle and culture.”

Following the NFT marketplace announcement, Oppenheimer analyst Jed Kelly reiterated a Buy and a price target of $80 (63.3% upside) on the stock. Kelly viewed the venture into the NFT marketplace as a favorable one and said, “Creating an NFT marketplace supports our sports entertainment platform thesis and reduces regulatory dependence.”

The analyst also added that DKNG could “leverage its sports-centric data-base of 5M that is much larger than other digital collectible exchanges.”

Furthermore, Kelly is of the opinion that the NFT marketplace could help DKNG “hedge revenue from downside scenarios related to regulation.”

DKNG’s online gaming and sports betting business is highly regulated and according to analyst Kelly, U.S. states are slow to regulate sports betting. That could prove to be a downside risk for the stock. According to the analyst, another risk to the stock is that live betting adoption among consumers is low.

On the other hand, DKNG’s NFT marketplace could result in higher engagement from its existing user base and provide cross-selling opportunities.

Turning to the rest of the Street, consensus is that DKNG is a Moderate Buy, based on 13 Buys and 6 Holds. The average DraftKings price target of $65.29 implies an approximately 33.2% upside potential to current levels.

Dolphin Entertainment (NASDAQ: DLPN)

Dolphin Entertainment is an independent entertainment marketing and premium content development company that provides strategic marketing and publicity services to major film studios and independent digital content providers.

Yesterday, the company’s stock popped 55.8% to close at $12.22 after a Variety report said that Dolphin will partner with West Realm Shire Services, owner and operator of FTX.US, to create an NFT marketplace for major sports and entertainment brands.

Through the agreement, Dolphin will develop and execute the production, creative branding, and marketing of these programs, while FTX will use its crypto exchange services and technical know-how about cryptocurrencies.

Dolphin and FTX will together develop and program global NFT marketplaces, targeting brands within the sports, film, television, music, gaming, eSports, culinary, lifestyle, and charity industries.

Early last month, a call took place between Dolphin’s CEO Bill O’Dowd and Maxim Group analyst Allen Klee. In the call, the CEO had indicated that the company is looking at opportunities to own content that could be supported with marketing and promotions, and could drive long-term profitability for the company.

In April this year, the company had unveiled its Dolphin 2.0 strategy as a part of which the company “will own (by ourselves and with partners) content, live events and consumer products which we are marketing.”

To achieve this objective, in March, Dolphin formed an NFT division to design, produce, release and promote NFTs for itself and its clients. The company has already entered into an NFT partnership with Hall of Fame Resort & Entertainment Company (HOFV), with its initial NFT offerings centered around professional football. (See Dolphin stock chart on TipRanks)

Along with the HOFV partnership, Dolphin has partnered with the South Beach Wine and Food Festival for an NFT collection from artist Romero Britto. The company has also entered into a new NFT category, Culinary, to produce an NFT Collectible Recipe Card system which will partner with top chefs, including chefs Nina Compton and Hugh Acheson.

Analyst Klee projects revenue growth of over 30% annually and improved bottom-line performance this year and the next. Growth will be driven by the re-opening of the economy and Dolphin’s end markets, cross-selling opportunities, and a rise in streaming content.

The analyst added, “For 2022, we expect double-digit organic growth from cross-selling and additional contributions from production content, NFTs and other businesses they plan to own. As a result, for 2022, we project revenue of $44.4M, up 40% y/y [year-over-year] and adjusted EBITDA of $7.7M, representing a 17.3% margin.”

Maxim Group analyst Allen Klee is the only one to have rated the stock in the past 3 months. He has a Buy rating with a price target of $28 on the stock. The Dolphin price target of $28 implies an approximately 129.1% upside potential to current levels.

Bottom Line

While analysts are cautiously optimistic about both stocks, based on the upside potential over the next 12 months, Dolphin seems to be a better Buy.

Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.

The post DraftKings vs. Dolphin Entertainment: Which NFT to Choose? appeared first on TipRanks Financial Blog.

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3 "Strong Buy" Stocks Under $10 With Substantial Upside Potential

Return and risk are two sides of the same coin. Investors all want the former, while keeping down the latter – but that’s a pipe dream. Every stock comes with Read More... The post 3 "Strong Buy" Stocks Under $10 With Substantial Upside Potential appeared first on TipRanks Financial Blog.

3 "Strong Buy" Stocks Under $10 With Substantial Upside Potential

Return and risk are two sides of the same coin. Investors all want the former, while keeping down the latter – but that’s a pipe dream. Every stock comes with both, and one key to success is managing the balance.

That balance can be tricky, however, as risk and return potentials usually follow a direct relationship; that is, the highest return stocks typically also come with higher risk. This makes sense, as the surest way to a high return is to find stocks with low initial share prices – for in those cases, even a small gain in absolute dollars will quickly translate into a high percentage of the initial investment. But the reverse is also true, and that substantial upside brings with it higher risk.

For investors willing to take it on, however, the market is full of sound choices. These are stock that fit a profile, a Strong Buy consensus rating, a low share price, and substantial upside potential.

We’ve run that search through TipRanks database, and found three stocks deserving a closer look. In addition to meeting the profile, they also bring with them one additional attribute: a unanimous analyst consensus, a sign for investors that Wall Street’s bullishness is no flash in the pan. Let's take a closer look.

Electric Last Mile Solutions (ELMS)

We’ll start in the automotive industry – specifically, in the electric vehicle (EV) segment. EVs aren’t new, they’ve been around since automobiles were invented in the 19th century. They are on the edge of an industrial breakout now, however, due to a confluence of political pressure that favors the ‘green’ economy and improved battery technology that makes EVs practical in ways they never were before. Modern EVs can reach ordinary highway speeds, with a ranges of 100 to 300 miles, on a single charge, and while still expensive, prices are coming down, putting them in reach of the masses.

Electric Last Mile, based in Troy, Michigan near to the heart of the Detroit’s historic automotive industry, is an EV company developing a customizable vehicle and boasts a 675,000 square foot assembly plant in Indiana that, at full capacity, will be able to produce 100,000 EVs annually. The company is aiming at the commercial market in urban areas, with a deliver van in pre-order now and a Class 1 commercial light truck under development. These vehicles are aimed at the ‘last mile,’ the final leg of the delivery chain in transport networks.

The delivery van features a 150 mile range, sufficient for daily urban deliveries, a 171 cubic foot cargo capacity, a 2,100 pound payload, and dimensions similar to existing gasoline powered vans. In addition, the vehicle will feature wireless connectivity. The vehicle is slated for production launch later this year.

ELMS started trading on the NASDAQ this past June, after completion of a SPAC merger with Forum Merger III. The transaction brought $379 million in new capital to ELMS.

Electric Last Mile Solutions has caught the eye of Jefferies’ 5-star analyst Stephen Volkmann, who’s impressed by the company’s selection of a target market in the delivery chain.

“Oddly, companies and markets have focused on electrification in the Heavy (Class 8) and Medium (Class 5-7) truck markets, despite significant range and cost challenges. In our view, the Class 1-3 ‘last mile’ market represents a much more significant opportunity for BEVs as these vehicles tend to have a relatively low level of daily mileage (50-60/day) and return to a home hub for consistent charging every evening. We estimate a TAM of over 800K veh/yr as eCommerce continues to drive higher demand for delivery vehicles, and we expect this segment to electrify fastest, driven my government incentives and corporate sustainability goals," Volkmann noted.

The analyst continued, "ELMS will be the first company to address these markets, with a vehicle already at cost parity with ICE vehicles and lower total cost of ownership. Assuming ELMS can successfully launch its vehicles as planned, we believe it can likely sell out its production for the next several years.”

To this end, Volkmann rates ELMS a Buy along with an $18 price target. The analyst, therefore, expects the stock to climb ~116% over the coming months. (To watch Volkmann’s track record, )

The unanimous Strong Buy consensus rating on ELMS is based on 5 reviews since the stock entered the public markets. Shares are currently priced at $8.30 each, and their $15.40 average price target suggests a one-year upside potential of ~86%. (See ELMS stock analysis on TipRanks)

Ouster (OUST)

Let’s stick with automotive-related companies. Ouster is a San Francisco-based tech company making LIDAR systems, a vital sensor technology used in autonomous vehicles. LIDAR allows self-driving cars to ‘see’ the road and traffic around them, both vehicular and pedestrian, in real time. It’s a vital link connecting an autonomous vehicle’s AI brain with the real world.

By the numbers, Ouster has a solid position in this growing industry. The company has 129 patents granted and pending, produces over 75 unique sensor combinations, and has over 500 customers around the world. In 2020, the company sold over 2,000 sensors. The company’s customers and partners include names like Qualcomm, Nvidia, and the US Army. Ouster’s digital LIDAR sensors are used in a variety of industries, including the automotive, but also in trucking, industrial production, infrastructure, and robotics.

In March, the company entered the public markets through a completed SPAC merger with Colonnade Acquisition, in a deal that valued the newly  public company at $1.9 billion. Ouster received $300 million in new funding from the deal, and started trading on the NYSE on March 12.

In business news, Ouster scored a major deal with Plus, a provider of autonomous trucks, to supply LIDAR sensor systems – up to 2,000 systems. The end user here will likely be Amazon, as the e-commerce giant has contracted with Plus to provide autonomous delivery vehicles.

This deal, putting Ouster in Amazon’s orbit, got the attention of Richard Shannon, 5-star analyst with Craig-Hallum. Shannon notes Plus’s announcement of its contract with Amazon, and then adds that the truck maker has already committed to contracts with Ouster. In his view, this will provide long-term support for Ouster.

“OUST’s announcement of its win with Plus for a minimum 2K sensors (in a 2 sensor/truck configuration), came just 2 weeks later. OUST had hinted the end-customer was a major US player, and after the 8K we’re fairly certain it’s AMZN. OUST indicated its win could be worth 160K sensors, implying AMZN is considering outfitting 80K trucks with autonomous technology over the next few years and showing the industry is ready to adopt this technology at scale," Shannon wrote.

The analyst added, “This is a major win for OUST and does two things: 1) shows that the demand for lidar in autonomous trucking is real and here today, and the biggest players in the world are getting involved and 2) further establishes OUST as the current market leader for lidar in trucking applications, as no other lidar maker has a production contract or an end-customer as impressive as AMZN.”

Based on the above, Shannon rates OUST shares a Buy, and his $20 price target suggests it has room for a 128% upside in the next 12 months. (To watch Shannon’s track record, )

Ouster has only been in the public markets for a few months, but in that time has picked up a unanimous Strong Buy consensus rating based on 3 positive reviews. The shares have an average price target of $16.67 and a trading price of $9.08, giving them a one-year upside of 90.5%. (See OUST stock analysis on TipRanks)

CareCloud, Inc. (MTBC)

The last small-cap stock we're looking at, CareCloud, is a medical and healthcare IT provider, offering tech services and support for all facets of the medical sector. The company was formerly called MTBC, but changed its name in March of this year. The business remains the same, however: tech support and cloud-based solutions for medical billing, practice management, transcription, and other vital back office support for physician practices and hospitals.

CareCloud will report its Q2 results this week, but a look back at the Q1 earnings may be useful. EPS came in at a loss of 36 cents, which was improved the 42-cent loss reported in the year-ago quarter. At the top line, revenue was down sequentially for the second quarter in a row – but at $29.8 million, it was up 36% year-over-year. The company reported $21 million in cash on hand.

On June 1, CareCloud announced that it had completed the acquisition of ‘certain assets’ from MedMatica, a major name in medical staffing and back office consulting. The assets acquired include Santa Rosa Staffing and MedMatica Consulting Associates; financial details were not disclosed. In a statement from management, CareCloud said that the new assets will allow provision of a broader range of services to health system clients.

Among the bulls is Cantor analyst Steven Halper who noted, "With the acquisition of CareCloud, the company added a SaaS-based EHR application. The company's large offshore workforce is a competitive advantage in its pricing as well as how it integrates acquisitions. Indeed, acquisitions have been an important component of the company's growth, and we expect that to continue."

The analyst added, "We think MTBC shares are inexpensive on an EV/EBITDA basis. However, the company's capital structure is complex given the previous issuance of perpetual preferred shares (MTBCP -Not rated). We believe MTBC is contemplating simplifying its corporate structure, which we believe would serve as a catalyst for the shares. Even with the preferred, we believe MTBC shares are very attractive at current levels..."

Halper gives MTBC shares an Overweight (i.e. Buy) rating, with a $15 price target that indicates confidence in ~88% upside over the year ahead. (To watch Halper’s track record, )

It’s not often that the analysts all agree on a stock, so when it does happen, take note. MTBC’s Strong Buy consensus rating is based on a unanimous 5 Buys. The stock’s $16.20 average price target suggests ~105% upside from the current share price of $7.91. (See MTBC stock analysis on TipRanks)

To find good ideas for small-cap stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The post 3 "Strong Buy" Stocks Under $10 With Substantial Upside Potential appeared first on TipRanks Financial Blog.

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