Shares of DraftKings (DKNG) jumped in after-hours trading after the company reported earnings for its fourth quarter of Fiscal Year 2024. Earnings per share came in at $0.14, which beat analysts’ consensus estimate of -$0.17. In addition, sales increased by 13% year-over-year, with revenue hitting $1.39 billion. This missed analysts’ expectations of $1.4 billion.
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These results were driven by strong customer engagement, as well as efficient customer acquisition and the expansion of the firm’s Sportsbook product into new markets. The revenue growth was also boosted by the acquisition of Jackpocket Inc. In addition, DraftKings’ monthly unique paying customers grew 36% year-over-year to 4.8 million.
However, it is worth noting that average revenue per customer declined 16% year-over-year to $97, primarily due to lower revenue from Jackpocket customers and unfavorable sports outcomes throughout the NFL season. Nevertheless, the company’s adjusted EBITDA for the quarter was $89.5 million, which was slightly above the consensus estimate of $89.2 million.
DraftKings Raises Its Revenue Guidance
Looking ahead, DraftKings raised its revenue guidance for Fiscal Year 2025 to a range of $6.3 billion to $6.6 billion. This revised guidance is slightly above the consensus estimate of $6.40 billion at the midpoint. Furthermore, the company is confident that its strategic initiatives will lead to profitability in the coming year.
What Is the Target Price for DKNG Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DKNG stock based on 20 Buys, two Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 6% rally in its share price over the past year, the average DKNG price target of $52.11 per share implies 12.19% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
