DraftKings Q4 Earnings Preview: Analyst Says Super Bowl LIX = 'Big Win For The Birds And The Books'

Sports betting and iGaming company DraftKings Inc DKNG could provide updated guidance after a Super Bowl outcome that may have been favorable to the sector when the company reports fourth-quarter financial results Thursday after market close.

Earnings Estimates: Analysts expect DraftKings to report fourth-quarter revenue of $1.43 billion, up from $1.23 billion in last year's fourth quarter according to data from Benzinga Pro.

The revenue estimate would mark a record for the company and come after DraftKings missed analyst estimates for revenue in two straight quarters. The company has beaten revenue estimates in seven of the last 10 quarters.

Analysts expect DraftKings to report a loss of 15 cents per share in the fourth quarter, down from a profit of 29 cents in last year's fourth quarter. The company has been profitable in four of the last six quarters.

While DraftKings missed revenue estimates in recent quarters, the company has a streak of beating analyst earnings per share estimates in 11 straight quarters.

Read Also: Super Bowl LIX Sets Viewership Record: How Many Watched NFL Championship, Kendrick Lamar’s Halftime

What Analysts Are Saying: A new investor note from Bank of America calls Super Bowl LIX good for the sportsbooks like DraftKings.

While Super Bowl LIX won't factor into the fourth-quarter results, the big NFL event could factor into 2025 guidance and forward-looking commentary from the company.

"Big Game = Big win for the birds and the books," Bank of America said.

GeoComply, which verifies bettors locations, said reporting activity was up 14% year-over-year for Super Bowl LIX. Betting handle in New Jersey was up 19% year-over-year.

"We think the ability to grow double-digits during the biggest event of the year is impressive and could help assuage concerns of slowing handle."

Sportsbooks also benefitted from the Super Bowl LIX outcome according to the Bank of America note. As Benzinga previously reported, sportsbooks favored an outcome where the Eagles won and the over/under was under 48.5 points. While the point total hit the over, the Eagles won the game, ending many future bets on a Chiefs three-peat.

Sportsbooks may have also benefitted from player props with Saquon Barkley and Travis Kelce not getting touchdowns as two of the most bet on anytime TD players.

Bank of America estimates that Super Bowl LIX could add $20 million to $25 million of EBITDA to DraftKings for fiscal 2025.

The report said that DraftKings led the sports betting sector for downloads on Super Bowl Sunday and new download share.

While the report points to several positives for DraftKings, analysts at Bank of America see headwinds from higher taxes in some states and a lack of regulatory certainty on new state legalizations.

"Despite the solid start to 2025, we don't expect DKNG to raise their FY guidance given regulatory uncertainty."

Bank of America analyst Shaun Kelly has a Buy rating and $54 price target on DraftKings.

Here are the recent analyst ratings on DraftKings and their price targets:

• Needham: Reiterated Buy rating, with $60 price target
• TD Cowen: Maintained Buy rating, lowered price target from $55 to $51
• Susquehanna: Maintained Positive rating, lowered price target from $56 to $54
• Benchmark: Reiterated Buy rating, with $44 price target

Key Items to Watch: DraftKings fourth quarter includes the months of October, November and December, which is prime NFL season for bettors.

The company already announced an adjustment to its 2024 guidance due to some unfavorable periods of outcomes for the sportsbook that favored bettors for NFL games.

Investors and analysts will be looking to see how the final figures came out for the quarter and how much of an impact NFL favorites winning so many games had on the sportsbook.

Guidance for 2025 and positive commentary on Super Bowl LIX will likely be the items that could move the stock after earnings.

DraftKings could also share more color on how other sports outside of the NFL are performing and what the next few months without football could mean.

DKNG Price Action: DraftKings stock is up 3.5% to $28.69 on Wednesday versus a 52-week trading range of $28.69 to $49.57. DraftKings stock is up 3% over the past year.

Read Next:

• Super Bowl LIX Rematch Again? Sportsbooks List Eagles, Chiefs As Top Favorites For Super Bowl LX

Photo: Shutterstock