D-Wave Quantum falls nearly 3% as earnings miss overshadows revenue beat
On Monday, Benchmark analysts maintained their positive outlook on Flutter Entertainment (NYSE:FLUT) shares, reiterating a Buy rating and a price target of $300.00. With a market capitalization of $40.24 billion and trailing twelve-month revenue of $14.05 billion, Flutter remains a dominant player in the gaming industry. The firm acknowledged a challenging first quarter for the company, noting that the U.S. sportsbook hold, particularly in New York during the last week of March, fell short of expectations. The hold percentage, which represents the amount of money retained by the sportsbook after paying out winners, was just 2.2% compared to 10.6% during the same period the previous year.
Despite the lower hold in the U.S. market, Benchmark’s analysts believe Flutter Entertainment’s overall strategy remains sound. The company continues to lead in the U.S. online sports betting and iGaming sectors, with impressive revenue growth of 19.15% in the last twelve months. This success is attributed to disciplined customer acquisition strategies, high retention rates, and a margin profile that benefits from innovative offerings such as "Your Way." According to InvestingPro analysis, Flutter maintains a GOOD financial health score, with analysts expecting continued net income growth this year. For deeper insights into Flutter’s financial metrics and growth prospects, subscribers can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
Flutter’s product differentiation and anticipated margin growth are seen as driving forces for sustained growth and value creation. The analysts also highlighted the company’s robust product pipeline as a key catalyst moving forward. Moreover, they expect a strong earnings performance in the second half of the year to further bolster the company’s financial position.
The resilience of the online gaming sector is underscored by Flutter’s performance, which appears to be well-insulated against broader economic fluctuations. The analysts’ commentary suggests that online gaming is a defensive category that can thrive even in less favorable macroeconomic conditions.
Benchmark’s confidence in Flutter Entertainment’s prospects is reflected in the maintained price target and rating, signaling a belief in the company’s capacity to navigate short-term challenges and capitalize on long-term opportunities in the online gaming market.
In other recent news, Flutter Entertainment has completed its acquisition of Snaitech S.p.A., an Italian gaming company, as part of its strategic expansion efforts. This acquisition is expected to bolster Flutter’s presence in the European gaming market, although the financial terms were not disclosed. Additionally, Citizens JMP analyst Jordan Bender has adjusted Flutter’s price target to $317, down from $328, while maintaining a Market Outperform rating. This revision anticipates a potential earnings miss in the first quarter of 2025 due to adverse game outcomes impacting EBITDA by $110 million. Despite these challenges, Flutter has increased its market share in the iGaming sector.
Furthermore, board member Atif Rafiq has announced he will not seek re-election at the upcoming Annual General Meeting, citing other commitments. Flutter has also disclosed its total voting rights in compliance with UK regulatory requirements, ensuring transparency with investors. Meanwhile, Barclays (LON:BARC) has noted shifts in the online sports betting and iGaming sectors, with FanDuel, a key player, experiencing mixed performance in market share metrics. These developments reflect Flutter Entertainment’s ongoing efforts to navigate the competitive landscape of the gaming industry.
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