Zinger Key Points
- DraftKings will report Q2 earnings results after market close Thursday.
- DraftKings has beat revenue estimates from analysts in the last six straight quarters and nine of the last 10 according to Benzinga Pro.
- Get Monthly Picks of Market's Fastest Movers
Online sports betting and iGaming company DraftKings Inc DKNG will report second quarter financial results after market close Thursday. Here’s a look at the estimates and what analysts are saying ahead of the report.
Earnings Estimates: Analysts expect DraftKings to report second quarter revenue of $759.55 million, according to data from Benzinga Pro.
The company reported revenue of $466.19 million in the second quarter last year and reported revenue of $769.65 million in the most recently reported first quarter.
DraftKings has beaten revenue estimates from analysts in the last six straight quarters and nine of the last 10 according to Benzinga Pro.
Analysts estimate the company will report a second quarter loss of 25 cents per share. The company reported a loss of 50 cents in the second quarter last year and reported a loss of 87 cents per share in the most recent first quarter.
The company has beaten earnings per share estimates in five straight quarters.
DraftKings raised its full-year revenue guidance after first quarter results. The company sees revenue in a range of $3.135 billion to $3.235 billion, which is up from previously guided $2.85 billion to $3.05 billion.
"Looking at the remainder of 2023, I am confident DraftKings is well-positioned to achieve profitability on an adjusted EBITDA basis in the near-term and deliver long-term value for our shareholders," CEO Jason Robins said.
Related Link: Exclusive: DraftKings CEO Says 'We're Seeing Really Strong Trends' Afer Q1 Beat, Guidance Raise
What Analysts Are Saying: Analysts have been updating their estimates and price targets ahead of the second quarter results.
Bank of America analyst Shaun C. Kelley sees a high bar set ahead for DraftKings but raised estimates based on "Strong momentum."
“We raise our DKNG estimates for Q2 to align with state level data and project revenue of $800 million,” Kelley said.
The analyst, who has a Buy rating and a price target of $35, sees the company raising its guidance again after second quarter results.
“A strong Q2 is expected, now the focus shifts to guidance.”
The analyst said a strong quarter from the BetMGM joint venture from MGM Resorts International MGM, helps strengthen the likelihood that DraftKings beats estimates.
“A key is whether DKNG could ‘reinvest’ part of its revenue strength back into promos to further accelerate growth. But we think DKNG will continue to strike a balance between growth and progress on profitability going forward.”
Roth MKM analyst Edward Engel is less optimistic about the second quarter earnings report for DraftKings, maintaining a Sell rating recently.
The analyst said stronghold rates from DraftKings in recent quarters could have more to do with luck than investors think.
Engel also said DraftKings has been more aggressive in promotions in recent months, which could impact rates.
The analyst said negative catalysts like Fanatics' entry in sports betting and tribes limiting additional state expansion could outweigh the upside on shares of DraftKings.
Engel raised the price target from $18 to $20.
Here’s a look at other analyst ratings and price targets from July ahead of the report:
TD Cowen analyst Stephen Glagola has an Outperform rating and raised the price target from $30 to $35.
Barclays analyst Brandt Montour has an Equal-Weight rating and raised the price target from $24 to $29.
Morgan Stanley analyst Stephen Grambling has an Overweight rating and raised the price target from $31 to $32.
Truist analyst Barry Jonas has a Hold rating and raised the price target from $26 to $31.
DKNG Price Action: DraftKings shares were down 1.2% at $29.87 during Thursday's premarket session, versus a 52-week trading range of $10.70 to $32.45. Shares of the sports betting company are up 175% year-to-date in 2023.
Shares surged 9% to $23.20 in after-hours trading after first quarter results were reported previously.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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