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DKNG Earnings: DraftKings Falls after Q2 Earnings Despite $1B Buyback
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DKNG Earnings: DraftKings Falls after Q2 Earnings Despite $1B Buyback

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DKNG stock is down in after-hours trading after reporting its Q2-2024 results.

Shares of DraftKings (DKNG), a firm that offers online sports betting, fantasy sports, and gaming platforms, fell in after-hours trading after it reported Q2-2024 earnings. This is despite the company beating EPS estimates, announcing a buyback program, and raising its revenue guidance for the year to $5.05-5.25 billion compared to $4.8-5.0 billion previously. The new revenue guidance suggests 38% to 43% growth.

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Meanwhile, earnings per share came in at $0.22, which beat analysts’ consensus estimate of -$0.01 per share, but sales of $1.104 billion slightly missed the consensus estimate of $1.113 billion.

The company has a solid history of beating EPS estimates, as you can see below.

Notably, the company announced its inaugural $1 billion buyback program (about 5.6% of its current market cap), as it is “very excited” about its free cash flow trajectory. Additionally, average monthly unique payers rose to 3.1 million in Q2 2024, marking a 50% increase compared to Q2 2023.

Apart from the higher revenue, DraftKings expects the following for 2024:

  • Adjusted EBITDA of $340-420 million for 2024 compared to the previous guidance of $460-540 million.
  • 2025 adjusted EBITDA between $900 million and $1 billion, unchanged from the prior guidance.

The lowered adjusted EBITDA guidance for 2024 is a likely culprit for the share price drop.

Is DKNG Stock a Buy, According to Analysts?

On TipRanks, DKNG stock comes in as a Strong Buy based on 25 Buys, two Holds, and zero Sell ratings assigned in the past three months. The average DraftKings stock price target of $52.17 implies 47% upside potential.

See more DKNG analyst ratings

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