DraftKings (DKNG) to Report Q1 Earnings: What's in Store?
DraftKings DKNG is set to report first-quarter 2022 results on May 6.
The Zacks Consensus Estimate for revenues is pegged at $404.2 million, indicating an increase of 29.43% from the year-ago quarter’s levels.
The consensus mark for loss has moved south by 2 cents in the past 30 days and is currently pegged at $1.24 per share.
Let’s see how things have shaped prior to this announcement.
Factors to Consider
Increasing global demand for online gambling and sports betting is expected to have positively impacted DraftKings’ first-quarter performance.
In the fourth quarter of 2021, DraftKings reported revenues of $473 million, up 47% year over year. During the same period, with mobile betting launching in several states, the company had an average of 1.5 million monthly unique paying customers engaged on its platform.
The robust demand for iGaming, such as Roulette and Blackjack, benefits from a spike in user activity. The trend is expected to have continued in the to-be-reported quarter.
To further expand its reach in the addressable market and strengthen user base, the company has been continuously working on adding depth to its mobile sports betting and iGaming products.
Presently, DraftKings is live with mobile sports betting in 18 states that collectively represent 36% of the U.S. population. It is live with iGaming in five states, representing approximately 11% of the U.S. population.
In the to-be-reported quarter, DraftKings is expected to witness strong growth in its B2C business, driven by payer acquisition and retention as well as player engagement and monetization. In the fourth quarter of 2021, the company’s monthly unique payers (MUPs) for the B2C segment increased 32% year over year. On average, 2 million monthly unique paying customers are engaged with DraftKings during each month of the fourth quarter.
DraftKings Inc. Price and EPS Surprise
DraftKings Inc. price-eps-surprise | DraftKings Inc. Quote
Key Developments in Q1
In January, DraftKings announced that it would become the official sportsbook provider for the government-run Oregon Lottery. Per the agreement, DraftKings Sportsbook replaced the current Scoreboard app, starting Jan 18.
DraftKings strategically launched its mobile sports betting in New York just ahead of the NFL Playoffs in the first quarter, one of the busiest periods for betting activity in a year. The company is set to become one of the first operators to launch in the Empire State.
In the to-be-reported quarter, DraftKings and the Tribes of Washington announced an exclusive market access partnership to bring DraftKings retail sportsbook experience to Washington. Once operational, Washington will mark the 19th state in which DraftKings is live with its Sportsbook product.
DraftKings also expanded its relationship with Golden Nugget Casino Lake Charles by launching its mobile sports betting for eligible customers in Louisiana.
These advancements have strengthened the company’s position in online sports wagering and are likely to have aided the company’s first-quarter top line.
What Our Model Says
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
DraftKings has an Earnings ESP of +5.53% and carries a Zacks Rank #3, currently. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies you may want to consider, as our model shows that these also have the right combination of elements to post an earnings beat in their upcoming releases:
fuboTV FUBO has an Earnings ESP of +37.55% and a Zacks Rank #2. The company is all set to announce its first-quarter 2022 results on May 5. You can see the complete list of today’s Zacks #1 Rank stocks here.
FUBO is up 41.3% in the past year against the Zacks Broadcast Radio and Television industry’s decline of 4.2% and the Consumer Discretionary sector’s fall of 23.1%.
Golden Entertainment GDEN has an Earnings ESP of +7.72% and a Zacks Rank #2. The company is set to announce first-quarter 2022 results on May 5.
GDEN is up 15.2% in the past year against the Zacks Gaming industry’s decline of 10.7% and the Consumer Discretionary sector’s fall of 23.1% in the past year.
SeaWorld Entertainment SEAS has an Earnings ESP of +38.64% and a Zacks Rank #2. The company is set to announce first-quarter 2022 results on May 5.
SEAS is up 42.7% in the past year against the Zacks Leisure and Recreation Services industry’s decline of 10.7% and the Consumer Discretionary sector’s fall of 23.1%.
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