DraftKings (DKNG) is set to report its third-quarter results on Thursday, after the market close, with Wall Street expecting steady revenue growth as the online betting giant continues to expand its customer base and state footprint.
The consensus EPS estimate is -$0.26 (-52.9% Y/Y) on revenue of $1.2B (+9.1% Y/Y).
Apart from the numbers, investors will watch for updates on customer growth, regulatory updates, profitability progress, and guidance revisions for FY2025.
Shares of Flutter Entertainment (FLUT) and DraftKings (DKNG) dropped on Tuesday after BofA Securities downgraded both betting platforms as state gaming tax risks in the U.S. and challenges within the prediction market present headwinds for further growth.
In the last two years, DraftKings’ (DKNG) iGaming has declined from 27% to 23%, and although Flutter’s (FLUT) FanDuel is more diversified than DraftKings’ (DKNG), the latter’s focus on iGaming has also driven some share loss.
DraftKings (NASDAQ:DKNG) made headlines in October after making a dramatic move into the predictions market business through the acquisition of Railbird Technologies, which is a federally licensed exchange designated by the Commodity Futures Trading Commission.
Jefferies analyst David Katz thinks the development is a positive for DraftKings (DKNG).
One Seeking Alpha analyst, however, notes that, while the acquisition of Railbird expands DraftKings’ TAM, its main advantage lies in the regulatory leverage it provides the company.
“The most significant risk to my bullish thesis on DraftKings is that the ongoing litigation against DCMs fails to secure a clear ruling on the legal status of sports-related contracts.”
Over the last 2 years, DKNG has beaten EPS estimates 63% of the time and has beaten revenue estimates 38% of the time.
Over the last 3 months, EPS estimates have seen 0 upward revisions and 8 downward. Revenue estimates have seen 1 upward revision and 24 downward.