DraftKings Earnings Top, Guidance Raised, But User Growth Falls Short
APARNA NARAYANAN
Investor's Business Daily
09:48 AM ET 08/06/2021
Online gambling app DraftKings ( DKNG) reported better-than-expected loss and revenue figures, though user growth fell short. That came a day after Penn National Gaming ( PENN) moved deeper into sports betting with its deal with for Score Media and Gaming ( SCR). DKNG stock rose.
DraftKings Earnings
Estimates: Analysts on average expected DraftKings to widen per-share losses to 42 cents from 37 cents in the year-ago quarter. Revenue was seen growing 227% to $245.5 million.
Analysts forecast monthly unique payers (MUPs) — a key metric — to grow 345% to 1.31 million.
Results: DraftKings lost an adjusted 26 cents as revenue swelled 320% to $298 million. Monthly unique payers jumped 281% to 1.1 million. Average revenue per MUP hit $80, up 26% vs. a year earlier.
Outlook: DraftKings hiked its full-year revenue target to $1.21 billion-$1.29 billion from May's forecast of $1.05 billion-$1.15 billion. Wall Street had expected $1.173 billion.
The results come after Penn National, which owns the Barstool Sports app, agreed to buy Score Media and Gaming for $2 billion.
Canada-based Score launched theScore Bet app for mobile wagers in 2019. Penn said the deal will give it access to in-house technology and allow it to broaden its product offerings.
DKNG StockShares rose 3.3% to 52.15 in Friday stock market trading. DKNG stock is well off highs with no buy point in sight, according to MarketSmith chart analysis. A move above its June high of 53.39 would be significant, especially since it coincides roughly with the 200-day average.
In 2020, DKNG stock emerged via a blank-check merger, about two years after the U.S. Supreme Court shot down rules preventing states from allowing sports betting.
Among other gambling stocks, MGM Resorts ( MGM), which offers the BetMGM app, was up 0.5%. Penn National edged down 0.2% after PENN stock jumped 9.1% on its Score Media deal.
On Thursday, DraftKings announced a multi-year deal with NFL data provider Genius Sports, adding to a string of moves to fuel growth. It came after DraftKings in April joined rival FanDuel and Caesars to become an official sports betting partner of the National Football League.
DraftKings acquired VSiN in March. It announced a deal with Meadowlark in April and another with Sports & Social in July that could see it open upscale sports bars.
And in May, DraftKings expanded strategic ties with MLB. It now offers live streaming of baseball games inside the DraftKings app.
"A normalized sports calendar and growing user bases in new and existing states should contribute to strong revenue growth," Canaccord Genuity analysts wrote Aug. 1. They rated DKNG stock a buy with an 80 price target.
"Recent legalization momentum is increasing the likelihood that more states will launch online sports betting around the start of the football season, including Arizona, Louisiana, and Maryland," they said, also noting recent legislative progress in the company's home state of Massachusetts.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
DKNG Stock: DraftKings Earnings Top, Guidance Raised, But User Growth Falls Short | Investor's Business Daily (investors.com) |
