Why this hot poker stock could be set to double

Shares of Amaya have surged some 30 percent in the past week, after news that New Jersey has granted the company's PokerStars and Full Tilt sites regulatory approval for real-money online poker in New Jersey.

And according to one analyst, shares of the poker stock still have a great deal more upside from here.

"We see this stock as a double—you just have to be patient and stick through some of these catalysts," said Chad Beynon, who covers the stock for Macquarie. "And we think this New Jersey announcement was a big one, and the first of many to come."

In 2011, the sites were shut down by the U.S. government. Two years later, PokerStars made an attempt to buy the now-defunct Atlantic Club casino. In 2014, Amaya gaming group acquired Rational Group, the owner of PokerStars and Full Tilt.

Now the New Jersey ruling should serve to "put a stamp of approval on the company," which makes it "a significant milestone, given the 'Bad Actor' debate and the level of due diligence the NJ Division of Gaming Enforcement conducted," the analyst wrote.

Read MorePokerStars Returns to the U.S.

There are a few caveats. Players will only be able to play in New Jersey, and only against fellow New Jersey players. And each site must be partnered with a bricks-and-mortar casino; PokerStars and Full Tilt are set to be attached to Resorts (a Boardwalk casino that, interestingly, does not currently have a poker room).

While he doesn't believe it will make a huge difference in terms of earnings, "what we think will change is the valuation and the multiples that will be ascribed to this company," Beynon said in a Friday "Trading Nation" interview.

The analyst has a $40 price target on the $24 stock. He sees the company's earnings doubling over the next few years, with much of that growth coming from its casino and sports gambling businesses, in addition to poker expansion.


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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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