Back to top

Image: Shutterstock

DraftKings (DKNG) to Report Q4 Earnings: What's in Store?

Read MoreHide Full Article

DraftKings (DKNG - Free Report) is set to report fourth-quarter 2020 results on Feb 26.

The Zacks Consensus Estimate for revenues currently stands at $230.6 million.

Moreover, the consensus mark for a loss of 57 cents per share has remained unrevised over the past 30 days.

Let’s see how things have shaped prior to this announcement.


DraftKings Inc. Price and EPS Surprise DraftKings Inc. Price and EPS Surprise

DraftKings Inc. price-eps-surprise | DraftKings Inc. Quote

Factors to Consider

DraftKings’ fourth-quarter performance is likely to have gained from the pent-up demand for sports-betting from the cancellation of major sports events due to the coronavirus crisis.

Resurgence in sporting events and the return of major sports leagues is anticipated to have been a major growth driver. Moreover, rising demand for online gambling on platforms such as online poker, casino games and lottery is likely to have fueled top-line growth.

Additionally, continued strength in iGaming, such as online Blackjack and Roulette, is expected to have driven user activity, thereby aiding user acquisition in the soon-to-be-reported quarter.

Notably, in the third quarter of 2020, the company’s average monthly unique payers grew from 621,000 to 1,021,000 on increased customer engagement on its casino and sports-betting platform. This solid performance is likely to have continued in the fourth quarter as well.

Apart from this, in December, DraftKings inked an agreement with InComm Payments to introduce an industry-first retail gift card, which will be offered in InComm Payments’ retail partner locations across the United States.

The deal is anticipated to have strengthened DraftKings market footprint by boosting its presence in convenience stores like 7-Eleven, Speedway, Dollar General (DG - Free Report) , and Sheetz, along with driving customer acquisition during the quarter under review.

Further, a broad content portfolio owing to partnerships with major sports teams, such as Major League Baseball, Chicago Cubs, New York Giants, Colorado Rockies, Philadelphia Eagles and Nashville Predators, along with media companies, like Disney’s (DIS - Free Report) ESPN and Turner Sports, a subsidiary of AT&T's (T - Free Report) WarnerMedia, is likely to have aided customer wins in the December-end quarter.

In November, the company also signed a deal with the Detroit Pistons, which makes DraftKings their exclusive official daily fantasy sports, official sports betting and iGaming partner.

Notably, the return of Live Sports like Golf, European Soccer, NASCAR and UFC, along with the return of Major League Baseball, the NBA and the NHL, is likely to have continued spurring demand for this Zacks Rank #4 (Sell) company’s sports betting products and contributed to the top line.

Furthermore, DraftKings’ widening sports-betting presence across three more states in the United States has expanded its addressable market. Launch of DraftKings’ sportsbook app in Illinois and Manchester in the last reported quarter and in Tennessee in the to-be-reported quarter is anticipated to have benefited DraftKings’ expansion plans.

You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>