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DraftKings Rally at Bernstein's Pre-Profit Bull Call

DraftKings Rally at Bernstein's Pre-Profit Bull Call

Posted: August 2, 2021, 09:43 NS.

Last updated: August 2, 2021, 10:02 NS.

Todd Shriber

DraftKings (NASDAQ: DKNG) shares are trading high on Monday after research firm Bernstein repeated "outperform" assessments of sportsbook operators.

draftkings stock
DraftKings shares rebound with bullish notes. The company reports earnings on Friday. (image:The Wall Street Journal)

The bullish call preceded the company's second-quarter earnings report scheduled for Friday, August 6, after DraftKings fell 7% in July. Of the US market. Bernstein said the batch of numbers from game companies (the fifth report as a public company) is likely to be "strong."

During the quarter, consensus was on the second quarter 2021 and fiscal year

We have consistently revised our earnings forecast upwards. — However, according to our calculations, second-quarter earnings may still be higher than expected, ”Bernstein said in a note to clients.

DraftKings limits what will be an active week of games and sports Caesars Entertainment (NASDAQ: CZR), MGM Resorts International (NYSE: MGM), Wynn Resorts (NASDAQ: WYNN), Penn National Gaming (NASDAQ: PENN) All stepped into a earnings confession from August 3rd to August 5th. ..

DraftKingsStock may need help to Surprise

Boston-based Daily Fantasy Sports (DFS) providers will need to get great results in June. The quarter is to trigger a shorter-term rise in stocks, while providing positive guidance for the current quarter, as some good news has already been burned into stocks. -Quarterly earnings report, DraftKings raised 2021 earnings outlook to $ 1. $ 051 billion to $ 1 $ 151 billion to $ 900 million to $ 1 billion. The outlook is relevant to the states in which they are currently operating and assumes no deviations from those states, and the national university and professional sports calendars will not change dramatically.

Operator 2021 Sales Forecast Upward Revision Starts September 9th NFL Season Due to Arizona, Louisiana, and Possibly Maryland May Regulate Sports Betting and Execution in Time

Analysts expect DraftKings to report on the April-June quarter $

Loss of 58 cents on revenue. 87 million.

Room for surprise

For now, that's just a guess. However, DraftKings has several ways in which analysts and investors can be happy to surprise with their next earnings report.

Given that the company is not profitable, it is possible to report narrower losses than expected. Indicates lower customer acquisition costs or stops losing money faster than Wall Street expects. The company can also show investors that it has gained market share in iGaming, online sports betting, or both. Or, more states are approaching the approval of online casinos. However, it is not yet known if any of these scenarios will be discussed in Friday's earnings announcement.

There is one thing that is clear. Sports betting stocks have fallen in recent months, with the August-October time frame historically the worst three months of the year for stocks, and DraftKings this week with disappointing numbers and conservative guidance. Shares may be punished if provided.