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anyone watching DraftKings (NASDAQ:DKNG) The post-earnings presentation for the fourth quarter may have been a little dizzying. The trading that followed was a rollercoaster ride, with the stock initially falling, but then rising again. In the end, the stock ended at about the same level as last time, reflecting the mixed developments at the sports betting giant.
Fourth-quarter sales rose 43.9% year-over-year to a record $1.23 billion, but fell slightly short of consensus expectations and slowed for the second consecutive quarter. MUPs (Monthly Unique Payers) increased by 3.5 million versus the consensus estimate of 3.44 million, and average revenue per MUP increased 6% to $116 compared to the Street’s estimate of $119.7.
In short, an adjective. EPS of $0.29 beat analysts’ expectations by $0.11. Going forward, the company has raised its full-year revenue guidance to a range of $4.65 billion to $4.9 billion, up from the previous range of $4.5 billion to $4.8 billion. At the midpoint, it beat consensus at $4.67 billion. The company also increased its 2024 adjustment amount. The EBITDA outlook is now in the range of $410 million to $510 million, up from the previous range of $350 million to $450 million.
DraftKings also announced that it will acquire lottery app company JackPocket for $750 million, with 55% in cash and 45% in DKNG stock.
Investors may have had a subdued reaction to the results, but JPMorgan analyst Joseph Greff liked the results. In response to the publication, the analyst revised upward his 2024 sales, EBITDA, free cash flow, and adjusted EPS forecasts.
“We look forward to DKNG’s continued execution in an attractive sector with attractive same-store and new market growth prospects, and the ability to leverage its scale to streamline operating expenses. We reaffirm our Overweight rating. We believe that DKNG has a strong moat (product, scale, brand), which makes it more competitive with recent new entrants (e.g. Caesars),” Greff said. Stated.
This overweight (or “buy”) rating comes with a new price target. Greff’s numbers are up from $45 to $55, suggesting the stock has room to grow 23% from current levels. (Click here to see Greff’s track record)
Most analysts agree with Greff’s theory. The stock has a consensus rating of “Strong Buy” based on a combination of 23 Buys, 3 Holds, and 1 Sell. Meanwhile, the average price target of $47.62 implies an upside of ~16% from current levels. (look DraftKings stock price prediction)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. Content is for informational purposes only. It is very important to perform your own analysis before making any investment.
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