What analysts are saying about DraftKings after its earnings report

DraftKings (NASDAQ:DKNG) is being sized up by analysts after knocking out record revenue with its second quarter earnings report and setting favorable guidance.

BTIG analyst Clark Lampen and his team see room for further upward earnings revision on DraftKings (NASDAQ:DKNG) over the balance of the year from structural hold improvements and promo leverage. The firm increased its full-year revenue and EBITDA estimates. “We now forecast revenue and EBITDA of $6.388B/$857M vs. $6.269B/$819M previously and guidance for the high end of a $6.2-6.4B revenue range + the midpoint of an $800-900M EBITDA range,” highlighted Lampen BTIG kept a Buy rating on DraftKings (NASDAQ:DKNG) and boosted its price target to $53.

Macquarie analyst Chad Beynon said the firm continues to favor DraftKings (DKNG) as the best way to play the online market in North America after the Q2 earnings report boosted its confidence. “DKNG has a long structural hold runway, which, combined with handle market share gains and a best-in-class in-play offering, positions DKNG for strong top- and bottom-line outperformance in the near future,” advised Beynon. Macquarie lifted its price target on DKNG to $55.

Needham Bernie McTernan also reiterated a Buy on DraftKings (DKNG) after the earnings release. McTernan said the sports betting company was able to check the box this quarter by maintaining its adjusted EBITDA guidance, despite absorbing headwinds from higher taxes and the launch in Missouri. “We continue to like the risk reward in shares as we think the stock is attractive on ’25 relative to our expected 25% to 30% adj. EBITDA CAGR,” wrote McTernan.

On Seeking Alpha, analyst Gary Alexander was more cautious on the setup for DraftKings (DKNG). He said there are still too many risks on the horizon to consider investing in DraftKings (DKNG), including a steep valuation, regulatory risk in California, slowing player growth and choppy execution, and unpredictable sports outcomes.

Shares of DraftKings (DKNG) are down about 4.2% since the earnings report was released.