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Investing.com - DraftKings Inc. (NASDAQ:DKNG), which has delivered an impressive 50.5% return over the past year and currently commands a market capitalization of $22.51 billion, maintained its Buy rating and $51.00 price target at Stifel following the company’s second-quarter earnings results that exceeded analyst expectations. According to InvestingPro, analysts maintain a strong bullish consensus on the stock, with price targets ranging from $37 to $78.
The sports betting operator reported a 24% beat on adjusted EBITDA for the quarter while guiding revenue to the high end of its previously stated range. The company maintained adjusted EBITDA guidance at the midpoint as Missouri launch costs and tax increases in Illinois, New Jersey, and Louisiana offset the second-quarter outperformance. InvestingPro data shows the company has maintained strong revenue growth of 22.86% over the last twelve months, with analysts expecting continued sales growth this year.
Stifel noted that favorable sports outcomes contributed significantly to DraftKings’ quarterly performance, exceeding forecasts and primarily accounting for the upside to estimates. The company also reported improvements in core value drivers, specifically structural hold expansion and promotional reinvestment.
Despite some concerns about online sports betting handle and iCasino net gaming revenue growth indicating potential market share losses, Stifel expects DraftKings shares to outperform in the near term. The firm cited steady improvement in core value drivers as providing confidence in the company’s ability to offset tax increases and progress toward its long-term 30% margin target.
Stifel indicated that both its financial model and $51 price target for DraftKings are currently under review following the earnings report. Based on InvestingPro’s Fair Value analysis, the stock appears fairly valued at current levels. Subscribers can access 12 additional ProTips and a comprehensive analysis of DraftKings’ financial health, which currently rates as "FAIR" based on multiple factors including growth, profitability, and momentum metrics.
In other recent news, DraftKings Inc. reported impressive second-quarter earnings, with revenue reaching $1.51 billion and Adjusted EBITDA of $301 million, surpassing both company guidance and Goldman Sachs estimates. The strong results were driven by favorable sports outcomes, leading Goldman Sachs to maintain its Buy rating and a $59.00 price target for the company. Additionally, DraftKings’ adjusted earnings per share came in at $0.38, significantly exceeding the analyst estimate of $0.13, with a 37% year-over-year revenue increase. Sportsbook revenue saw a notable rise of 45.3% to $997.9 million, while iGaming revenue increased by 22.6% to $429.7 million.
Bernstein SocGen Group also raised its price target for DraftKings to $55.00 from $52.00, maintaining an Outperform rating, citing strong performance from live betting monetization and growth potential in online sports betting. BofA Securities reiterated its Buy rating and $50.00 price target, highlighting the company’s "big headline beat" in the second quarter and addressing concerns about structural hold and handle growth. These developments reflect the company’s solid position in the online gaming market and its potential for further growth.
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