DraftKings (NASDAQ:DKNG) inventory is trading higher Monday after explore steadfastly Bernstein reiterated an “outperform” rating on the sportsbook operator.
That bullish claim comes after DraftKings cast off VII percent inwards July, and in advance of the company’s second-quarter earnings story scheduled for Friday, Aug. 6, prior to the undetermined of US markets. Leonard Bernstein said that hatful of numbers from the gaming society — its fifth story as a public keep company — is potential to live “strong.”
During the quarter, consensus has consistently revised upwards revenue estimates for Q2 2021 as substantially as FY 2021 — however, according to our calculations, Q2 revenues are ease likely to remnant upwardly above street expectations,” said Leonard Bernstein inward a mention to clients.
DraftKings caps what testament be an alive(p) week of gaming and sports wagering earnings as Caesars Entertainment (NASDAQ:CZR), MGM Resorts International (NYSE:MGM), Wynn Resorts (NASDAQ:WYNN) and Penn National Gaming (NASDAQ:PENN) all stone's throw into the earnings confessional betwixt Aug. 3 and Aug. 5.
DraftKings Stock May Need Help to Surprise
The Boston-based day-to-day fantasise sports (DFS) provider likely needs to pitch stellar results for the June quarter, piece delivering prescribed steering for the stream quarter, inwards enjoin to stoke to a greater extent near-term upside inward the shares, because some serious news is already baked into the stock.
In May, next its first-quarter earnings report, DraftKings boosted its 2021 revenue outlook to $1.05 billion to $1.15 billion from $900 jillion to $1 billion. That outlook pertains to the states inwards which it’s currently operational, assumes no departures from those states, and that the domestic help collegiate and professional person sports calendars testament non live dramatically altered.
It’s possible that in that respect is way for an upward revision to the operator’s 2021 sales forecast because Arizona, Louisiana, and perhaps Maryland could have got regulated sports betting upwards and running inwards time for the start of the NFL flavor on Sept. 9.
For the Apr through June quarter, analysts look DraftKings testament story a red ink of 58 cents a deal on revenue of $245.87 million.
Room for Surprises
For now, it’s just now speculation. But DraftKings has several avenues inward which it could pleasantly surprisal analysts and investors with its upcoming earnings report.
Given that the keep company isn’t profitable, it could news report a narrower-than-expected loss, present a diminution inwards client acquisition costs, or indicate it testament cease losing money sooner than Wall Street expects. The fellowship could also exhibit investors it’s gaining marketplace portion in either iGaming, online sports betting, or both. Or that to a greater extent states are close-fitting to affirmative online casinos. However, it remains to follow seen if any of these scenarios will be discussed on the Fri earnings call.
One thing is clear. With sports betting stocks slumping inward recent months and the Aug through October clip frame historically existence the worst three-month stretch of the twelvemonth for equities, if DraftKings delivers dissatisfactory numbers or downbeat guidance this week, it’s possible the carry testament follow punished.