Sports activities betting firm DraftKings Inc (NASDAQ:DKNG) might present extra particulars on how it’s competing towards prediction markets and its current acquisition within the house when the corporate report third-quarter monetary outcomes Thursday after market shut.
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Listed here are the earnings estimates, what analysts are saying and key objects to look at.
Earnings Estimates: Analysts anticipate DraftKings to report third-quarter income of $1.23 billion, up from $1.09 billion in final 12 months’s third quarter, in accordance with information from Benzinga Professional.
The corporate has crushed analyst estimates for income in 5 of the previous 10 quarters total, together with the just lately reported second quarter.
Analysts anticipate DraftKings to report a lack of 40 cents per share within the third quarter, down from a lack of 17 cents per share in final 12 months’s third quarter.
The corporate has crushed analyst estimates for earnings per share in 9 of the final 10 quarters total, together with essentially the most just lately reported second quarter.
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What Analysts Are Saying: Financial institution of America Securities analyst Shaun C. Kelley downgraded each DraftKings and peer firm Flutter Leisure (NYSE:FLUT) forward of their upcoming earnings experiences.
The analyst mentioned there are quite a few challenges dealing with the sports activities betting firms, together with the rise of prediction markets.
Kelley downgraded DraftKings inventory from Purchase to Impartial and lowered the worth goal from $48 to $35.
Objects resembling unfavorable sports activities outcomes, underperformance in iGaming, tax headwinds and extra might harm DraftKings going ahead, Kelley mentioned in a brand new investor word.
“Relentless headwinds might recalibrate long-term earnings,” Kelley mentioned.
The analyst mentioned DraftKings’ structural maintain doesn’t “look so structural anymore,” noting that third-quarter and fourth-quarter sports activities outcomes might result in volatility in financials.
Kelley mentioned DraftKings’ mannequin “is extremely delicate to Maintain.”
“Moreover, we expect prediction markets current a difficult near-term narrative.”
The analyst mentioned even with out the opposite headwinds, the inventory would get downgraded “solely on prediction markets.”
Listed here are different analyst scores for DraftKings and their worth targets:
- BMO Capital: Maintained Outperform score, lowered worth goal from $65 to $63
- Bernstein: Maintained Outperform score, lowered worth goal from $55 to $50
- Stifel: Maintained Purchase score, lowered worth goal from $51 to $50
- Truist: Maintained Purchase score, lowered worth goal from $55 to $50
- Susquehanna: Maintained Constructive score, lowered worth goal from $64 to $59
Key Objects to Watch: Prediction markets will seemingly be one of many hottest subjects when DraftKings experiences, particularly throughout the Q&A portion of the convention name.
The corporate will seemingly spotlight its just lately introduced acquisition of Railbird Applied sciences, a federally licensed trade firm for prediction markets regulated by the Commodity Futures Buying and selling Fee.
The acquisition is probably going to assist enhance DraftKings into the regulated occasion contract house. The corporate plans to launch a cellular app with occasion contracts referred to as DraftKings Predictions. Buyers and analysts will need to hear extra concerning the timeline and the potential income alternative from cross-selling current clients.
Robinhood Markets (NASDAQ:HOOD) reported quarterly financials on Wednesday and confirmed robust progress for its occasion contracts enterprise, which is now doing greater than $100 million in annualized income. The corporate mentioned Occasion Contracts Traded within the third quarter greater than doubled from the second quarter to 2.3 billion within the quarter.
Occasion contracts traded in October for Robinhood already surpassed the third-quarter complete with 2.5 billion contracts for the month.
DraftKings’ third quarter will embrace the beginning of the 2025 NFL season, which is anticipated to set data for sports activities betting and can seemingly see a surge of latest customers wagering with prediction markets.
The American Gaming Affiliation predicts that $30 billion can be wagered on the 2025 NFL season with authorized sportsbooks within the U.S., up 8.5% year-over-year. DraftKings is among the largest winners of this complete and the third quarter outcomes might present how some unfavorable outcomes with a lot of favorites successful impacted outcomes.
The corporate has needed to regulate steerage beforehand primarily based on quarters with unusually favorable outcomes for purchasers, together with NFL video games.
DraftKings reported document income, web revenue and adjusted EBITDA within the earlier quarter, making this one essential to point out continued progress and powerful monetary metrics.
The corporate maintained its full-year steerage for income and adjusted EBITDA after second-quarter outcomes regardless of a double beat and a few data. Buyers and analysts will need to see steerage keep the identical or enhance, with lowered steerage having the potential for sending shares even decrease.
DKNG Worth Motion: DraftKings inventory closed Wednesday down 2.41% to $27.92, with shares hitting a brand new 52-week low of $27.89 throughout the day’s buying and selling session. DraftKings inventory is down 23.1% year-to-date in 2025, with shares down over 20% within the final month alone.
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