Share prices of DraftKings (NASDAQ: DKNG) have soared to new highs in 2024, prompting analysts at Mizuho Securities to initiate coverage of the stock with a "buy" rating and a price target of $58. This target represents a 24% upside over the next 12 months from the stock's current price, indicating continued growth potential for the online sports betting company.

Mizuho Securities is particularly bullish on DraftKings due to its dominant presence in the North American online sports betting market, capturing over 30% market share. This market leadership allows DraftKings to attract new customers without significantly increasing marketing expenses, resulting in higher profits. The company's ability to control operating expenses through effective marketing strategies is seen as a valuable lever for future profitability.

In Q4 of the previous year, DraftKings demonstrated a notable improvement, with its net loss narrowing from $242 million to $44 million. The management is optimistic about the future cash flow projections, expecting positive free cash flow ranging from $310 million to $410 million for 2024. This positive outlook on cash flow is expected to further bolster the stock's performance.

While DraftKings stock presents an attractive investment opportunity, some analysts caution that it currently trades at an expensive valuation. However, given the ample growth potential in the online gaming and sports betting markets, patient investors may still benefit from continued upward momentum.

DraftKings also possesses an advantage in terms of leveraging its in-house developed games and content without incurring third-party fees. This flexibility provides multiple avenues for the company to generate profits in the long run.

The Motley Fool Stock Advisor analyst team, however, did not include DraftKings among their top 10 stock picks. Instead, they highlighted 10 other stocks that they believe could generate substantial returns in the coming years. The Stock Advisor service offers investors comprehensive guidance, including portfolio building strategies, regular analyst updates, and two new stock picks per month. It boasts a track record of outperforming the S&P 500 since 2002, making it an appealing resource for investors seeking investment opportunities.

As DraftKings continues its growth trajectory, investors are left to decide whether to invest in the stock at its current prices. With management indicating that they are still in the early stages of their growth opportunity, the company shows potential for sustained success in the online gaming and sports betting industry.