The DraftKings app on an iPhone
Andrew Harrer/Bloomberg
DraftKings is set to report fourth-quarter results Friday morning. Analysts expect the company’s sales to come in 75% higher than in the third quarter.
Shares of the online sports betting firm (ticker: DKNG) have surged roughly 230% since the company went public via a merger with a special purpose acquisition company in April. Shares rallied in the spring and summer, even before major U.S. sports returned to action. In the fall, states like New Jersey and Nevada saw heightened interest in sports betting.
DraftKings has three main segments: online sports betting, iGaming, and daily fantasy sports. IGaming is a term for online casino games, while daily fantasy sports let fans pick players and win prizes on a week-to-week basis.
For the fourth quarter, Wall Street’s consensus estimate is a net loss of 43 cents a share, according to FactSet. But analysts expect sales to hit $233.2 million, up from $133 million in the third quarter.
BofA Securities analyst Shaun C. Kelley expects fourth-quarter sales of $245 million. He raised his price target on the stock to $65 from $60 in a note earlier this week, though he reiterated a Neutral rating on the stock. He notes that following earnings, he expects some 60 million shares will no longer be locked up, meaning the stock could see near-term price pressure if insiders sell some of their shares.
He notes DraftKings had previously set an outlook for full-year 2021 sales between $750 million and $850 million. Since DraftKings mobile sports betting launched in Michigan and Virginia, he sees potential for management to increase that range.
Macquarie analyst Chad Beynon wrote in a note on Tuesday that he expects fourth-quarter revenue of $235 million, and has an Outperform rating with a $68 price target.
“As our top pick in online gaming, we continue to believe that DKNG has all the right tools to maintain its position as a clear top 2 player—strong brand, pristine balance sheet, proprietary tech, data science and retention tools, league/team sponsorships, and media partnerships,” he wrote.
Of the 28 analysts listed by FactSet, 19 have Buy or equivalent ratings, while eight have Hold ratings. The mean price target for the stock is $63.60, according to FactSet.
DraftKings stock was down 4.1% to $57.81 on Thursday. The S&P 500 index was down 2.5%.
Write to Connor Smith at [email protected]
