Fiserv earnings missed by $0.61, revenue fell short of estimates
Investing.com - Stifel lowered its price target on DraftKings Inc. (NASDAQ:DKNG) to $50.00 from $51.00 on Monday, while maintaining a Buy rating on the sports betting company’s stock. The company, currently valued at $16.4 billion, has demonstrated strong revenue growth of 25.8% over the last twelve months, with analysts expecting continued sales growth this year.
The research firm cited a "compelling FCF trajectory and upward bias to consensus estimates" in its analysis of DraftKings, pointing to the company’s product execution and healthy same-state handle/GGR growth trends.
Stifel noted that DraftKings benefits from several positive factors, including incremental state legalization, structural hold-rate expansion, and "sustained rationality in market-wide marketing/promos."
The firm acknowledged persistent concerns about disruption from new entrants in the sports betting market, including ESPN Bet, Fanatics, bet365, and BetMGM, but emphasized that DraftKings’ scale, first-mover advantage, and "swiftly achieved product co-leadership" provide powerful strategic advantages.
Stifel described valuation as "a challenging exercise," but considered it reasonable compared to historical European comparables, assuming the firm’s "stabilized" Adjusted EBITDA forecasts prove accurate.
In other recent news, DraftKings Inc. has announced the acquisition of Railbird Technologies Inc., including its federally licensed exchange subsidiary, Railbird Exchange. This strategic move allows DraftKings to expand into the prediction markets space, offering regulated event contracts through a new mobile application called DraftKings Predictions, set to launch soon. The financial details of the acquisition have not been disclosed, but the move has garnered attention from investors and analysts alike. Stifel has reaffirmed its Buy rating on DraftKings with a $51.00 price target, highlighting the potential benefits of this acquisition.
Benchmark has also maintained its Buy rating on DraftKings, despite anticipating a challenging third quarter due to weak hold and elevated promotional expenses. The firm expects these factors to impact profitability and result in earnings below consensus expectations. Similarly, Citizens has reiterated its Market Outperform rating, projecting a "fairly negative quarter" with sports betting and iGaming revenue likely falling short of market expectations. These developments reflect a mix of strategic growth initiatives and anticipated financial challenges for DraftKings in the near term.
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