DraftKings headquarters in Boston, Massachusetts.
Courtesy of DraftKings
DraftKings stock rose on Tuesday after an analyst at Loop Capital Markets suggested that monthly wagering data releases from a half-dozen states bode well for the online sports betting firm.
Analyst Daniel Adam analyzed states that DraftKings operates in that have thus far reported recent monthly gross gaming revenue and adjusted gross revenue data, which includes Illinois, Indiana, Iowa, Michigan, New Jersey, and Pennsylvania. He thinks the data suggest DraftKings’ second-quarter revenue is on pace to beat Wall Street’s consensus estimates. Adam estimates DraftKings’ average daily revenue quarter-to-date is down only 11% sequentially, far better than the 23% decline analysts are modeling for the quarter.
“In other words, based on the latest monthly GGR and AGR data releases, we expect another ‘beat and raise’ quarter from our top pick, Buy-rated DKNG,” Adam wrote.
DraftKings stock (ticker: DKNG) was up 2.4% to $50.16, while the S&P 500 index was up 0.5%. DraftKings shares have mostly recovered from a drop earlier this month when Hindenburg Research alleged its SBTech subsidiary sold products to organizations with operations in places where gambling is prohibited.
DraftKings said at the time that SBTech does not operate in illegal markets, noting it conducted a review of its business and was “comfortable with the findings.” Analysts mostly shrugged off the report from the short seller, arguing that the allegations weren’t particularly new.
Write to Connor Smith at [email protected]
