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Investing.com - Stifel has reiterated its Buy rating on Flutter Entertainment (NYSE:FLUT), a $42.42 billion market cap gaming company with 15.63% revenue growth over the last twelve months, following discussions with company management about prediction markets. According to InvestingPro data, analysts expect strong sales growth of 30% this year.
Stifel analyst Jeff Stantial noted that CEO Peter Jackson expressed optimism about prediction markets, stating they should prove "either net good, or net great" for Flutter Entertainment, which the analyst characterized as notable given Jackson’s "historically balanced/honest perspective." Trading at a P/E ratio of 121.11, Flutter’s valuation reflects high growth expectations. InvestingPro subscribers can access 12 additional key insights about Flutter’s valuation and growth prospects.
While Stifel had previously focused on product deficiencies in its research, Flutter management emphasized that lack of generosity primarily explains why exchanges will struggle to compete with traditional sportsbooks even at maturity.
The company also highlighted potentially misleading volume metrics, noting that $1.5 billion of trading volume on Betfair around the presidential election translated to only approximately $8 million in revenue, and pointed to misunderstandings around Kalshi pricing.
Flutter management indicated that while its CME partnership was originally intended for novelty-type markets primarily as a customer acquisition tool, the company now sees a path to offering sports prediction markets in some states potentially following quickly after product launch.
In other recent news, Flutter Entertainment’s earnings and revenue results remain a focal point for investors, with no new financial disclosures in their latest regulatory filing. The company announced a disclosure regarding its total voting rights, complying with the UK Financial Conduct Authority’s rules, but did not report any material changes. Analyst firm Citizens reiterated a Market Outperform rating for Flutter Entertainment, maintaining a price target of $340. This confidence is supported by Flutter’s CEO, who expressed optimism about the company’s long-term trajectory and plans to diversify betting offerings.
Benchmark also maintained its Buy rating on Flutter, setting a price target of $365 amid concerns about competitive pressures from prediction markets. Meanwhile, DraftKings, a competitor in the sports betting industry, faced a lowered price target from Benchmark, reduced to $43 due to anticipated third-quarter challenges. These challenges include unfavorable sports outcomes and increased promotional expenses, compounded by a difficult macroeconomic environment.
These developments highlight the ongoing dynamics within the sports betting sector, with Flutter Entertainment and DraftKings navigating their respective market challenges and opportunities.
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