Online playing app DraftKings (DKNG) stories first-quarter earnings early Friday after the 12 months’s largest occasions in sports activities betting. DraftKings inventory fell.
DraftKings Earnings Report
Estimates: Per-share losses are anticipated to widen to 51 cents from 18 cents a 12 months in the past, whereas income surges 151% to $222.6 million.
Results: Check again early Friday.
The report comes after the Super Bowl in February, when 50 million extra individuals in 2021 than in 2020 had been capable of guess as extra states legalize sports activities playing, in accordance with PlayUSA.com, which estimated 80% 0f the $500 million in wagers had been on-line.
The following month got here the March Madness NCAA males’s basketball event. PlayUSA Network stated the 16-day event’s deal with got here in at about $1.5 billion.
“Betting on the NCAA Tournament came in on the high end of our projections,” stated PlayUSA Network analyst Eric Ramsey. “Enthusiasm in new markets, particularly in Michigan, Tennessee and Virginia, but also in Colorado and Indiana, really helped make March Madness a massive success. It also helped that New Jersey and Nevada, the two largest markets in the U.S., met what were lofty expectations.”
But buyer acquisition prices are rising because the pool of potential gamblers continues to develop. In This fall, DraftKings invested $184 million on gross sales and advertising and marketing vs. $63 million a 12 months earlier. In a name with traders, CFO Jason Park stated the firm expects to spend extra on advertising and marketing in 2021 in comparison with 2020.
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Shares fell 6% to 52.85 on the stock market today. DraftKings stock is effectively beneath the 10-week line and is now testing the 40-week line, in accordance with MarketSmith chart analysis. There is at present no buy point for the inventory, as it’s not forming any bases, and the relative strength line is trending downward.
MGM Resorts (MGM), which operates on-line betting app BetMGM, slipped 2.4%. And Penn National Gaming (PENN), which has a stake within the Barstool betting platform, offered off 7.5% after reporting blended earnings early Thursday.
Caesars Entertainment (CZR) eased 0.8% after leaping 7.8% Wednesday on blended Q1 outcomes and indicators of robust Vegas demand.
Meanwhile, DraftKings inventory is eyeing a lift from the New York market. Gov. Andrew Cuomo final month accepted laws to permit on-line sports activities betting within the state. The plan is to initially enable two platforms with the potential for including extra later.
DraftKings inventory obtained a lift March 30, when it introduced it had purchased sports activities betting video broadcast firm Vegas Sports Information Network. Launched in 2017, VSiN is a multiplatform broadcast and content material firm delivering sports activities betting information, evaluation and knowledge. Terms of the deal weren’t disclosed.
The acquisition permits DraftKings, which is reside in 14 states, to additional construct out its content material capabilities and develop VSiN’s skill to broaden its viewers. In a notice to purchasers after the acquisition, Jefferies analyst David Katz stated VSiN expands DKNG’s buyer acquisition value efficiencies sooner or later.
DraftKings has current broadcasting partnerships with Disney‘s (DIS) ESPN and Dish Network (DISH). It can also be an official accomplice to the NBA, MLB, NFL, NASCAR, UFC and PGA Tour.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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