Shares of DraftKings Inc. (NASDAQ:DKNG) rallied roughly 8% in after-hours trading following the release of its Q3 results, which surpassed expectations and led to an upgraded full-year outlook. The sports betting firm reported adjusted earnings per share of $0.35, a significant turnaround from the estimated loss of $0.69 per share.
Sales for the quarter rose by 57.4% year-over-year to $789.9 million, exceeding the projected $704.9 million, propelled by new customer acquisition and product innovation. The number of Monthly Unique Payers grew by 40% to reach 2.3 million, while revenue per user climbed by 14%.
By the end of Q3, mobile sports betting was operational in 22 states and iGaming was available in five states. This expansion led DraftKings to increase its fiscal 2023 revenue guidance from $3.46-$3.54 billion to $3.67-$3.72 billion.
The company also expects FY23 adjusted EBITDA to fall between ($95) and ($115) million. Despite this, Deutsche Bank (ETR:DBKGn) analyst Carlos Santarelli maintained a Hold rating on DKNG stock, which has a Strong Buy consensus rating based on 21 Buys, four Holds, one Sell.
DraftKings' shares have soared 162% in 2023, with two other analysts maintaining a Buy rating on the stock. The company also introduced a fiscal 2024 revenue outlook of $4.50 billion to $4.80 billion.
On Friday, DraftKings Inc.'s shares closed at $28.98, up by 6.43%, with a trading volume of 26.2 million and short interest at 23.79 million shares. The company's market cap stands at $13.45 billion, down by 19.01% from its 52-week high but up by 63.11% from its year-low.
Analysts have set a target price range of $22.50 to $44.00 for the stock, which carries an Overweight rating with a mean rating of 1.59. The consensus price target stands at $36.13, indicating a potential upside of 19.79%.
The company's 5-day and year-to-date price performances stand at 10.53% and 154.43% respectively, significantly outperforming the industry's year-to-date growth rate of 4.90%. Revenue is forecasted to grow by 30% this quarter to $686.31 million, then surge by 115% to $1.2 billion in the next quarter.
DraftKings is expected to release its next earnings report in December, with an average dividend yield of 0.00%.
InvestingPro Insights
In addition to the data provided in the article, InvestingPro offers valuable insights that can further enrich the analysis of DraftKings Inc. (NASDAQ:DKNG).
InvestingPro data reveals that DraftKings has an adjusted market capitalization of $14.65 billion and a revenue of $3001.65 million in the last twelve months as of Q2 2023, with an impressive growth rate of 91.24%. The company's Price / Book ratio in the last twelve months as of Q2 2023 stands at 13.24.
InvestingPro Tips also highlight several noteworthy aspects. Firstly, DraftKings' revenue growth has been accelerating, which aligns with the article's mention of a 57.4% year-over-year sales increase for Q3. Secondly, there's a consistent increase in the company's earnings per share, which is reflected in the Q3 results where the company reported adjusted earnings per share of $0.35, a significant turnaround from an estimated loss. Lastly, the analysts anticipate sales growth in the current year, which is in line with DraftKings' increased fiscal 2023 revenue guidance.
For more in-depth analysis and additional tips, consider exploring InvestingPro's services, where you'll find a comprehensive suite of tools and resources to help you make informed investment decisions.
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