DraftKings to Report Q1 Earnings: What's in Store?

DraftKings DKNG is set to report first-quarter 2024 results on May 2.
The Zacks Consensus Estimate for revenues is pegged at $1.13 billion, indicating an increase of 46.24% from the year-ago quarter's levels.
The Zacks Consensus Estimate is pegged at a loss of 28 cents per share, which has remained unchanged in the past 30 days.
The company's earnings beat the Zacks Consensus Estimate in two of the trailing four quarters while missing the same twice, delivering an average negative surprise of 57.07%.
Let's see how things have shaped prior to this announcement.

Factors to Consider

DraftKings' first-quarter results are expected to have benefited from the increasing global appetite for online gambling and sports betting.
The leading digital sports entertainment and gaming company's strategic efforts to expand its Sportsbook product into new jurisdictions and enhanced promotional investments for Sportsbook and iGaming are likely to have paid off, driving substantial customer acquisition, engagement and retention in first-quarter 2024. DraftKings' Monthly Unique Payers (MUPs) increased to 3.5 million in fourth-quarter 2023, representing a rise of 37% year over year and reflecting strong traction across its Sportsbook and iGaming products.
DraftKings kicked off 2024 by launching its top-rated online sportsbook in Vermont on Jan 11, marking its presence in 26 U.S. states and Ontario, Canada. The company further bolstered its reach by announcing plans to go live in North Carolina on Mar 11, 2024, pending regulatory approvals. With this addition, DKNG's Sportsbook will be available in 27 U.S. states and Ontario, collectively representing approximately 50% of the U.S. population.
In fourth-quarter 2023, the company reported an Average Revenue per MUP of $116, up 6% year over year, primarily driven by an improved structural sportsbook hold rate. This positive trend is expected to have continued in the to-be-reported quarter.
DraftKings is also live with iGaming in five states, representing approximately 11% of the U.S. population. The demand for iGaming, such as Roulette and Blackjack, is expected to have aided growth in active user activity in the to-be-reported quarter.
Alongside its growth initiatives, DKNG remains committed to responsible gaming, unveiling My Stat Sheet, a tool that empowers players to track their personal gaming statistics and make informed decisions.
With its aggressive expansion, product diversification and focus on responsible gaming, DraftKings is poised to capitalize on the surging demand for online gambling and sports betting, solidifying its position as a market leader in the rapidly evolving industry.

What Our Model Says

Our proven model does not predict an earnings beat for DraftKings this time around. Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
DraftKings currently has an Earnings ESP of +12.65% and carries a Zacks Rank #3.

Other Stocks to Consider

Here are some other stocks worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings this season.
APi Group APG has an Earnings ESP of +2.06% and sports a Zacks Rank #1 at present.
APi Group is scheduled to release first-quarter 2024 results on May 2. The Zacks Consensus Estimate for APG's earnings is pegged at 32 cents per share, indicating growth of 28% from the year-ago quarter's reported figure.
Arista Networks ANET has an Earnings ESP of +2.49% and sports a Zacks Rank #1 at present.
ANET is set to report first-quarter 2024 results on May 7. The Zacks Consensus Estimate for the company's earnings is pegged at $1.74 per share, indicating a rise of 21.68% from the year-ago quarter's reported figure.
Docebo DCBO has an Earnings ESP of +8.00% and a Zacks Rank #3 at present.
DCBO is set to report first-quarter 2024 results on May 9. The Zacks Consensus Estimate for the company's earnings is pegged at 17 cents per share, indicating growth of 88.89% from the year-ago quarter's reported figure.
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