DraftKings hailed after shares pop following Q3 revenue results

Article by : Charles Perrin Nov 6, 2023

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DraftKings has consolidated its position as igaming royalty and the undisputed king, generating more gross gaming revenue than any other site in the US.

The distinguished casino and sports betting operator outpaced financial projections for Q3 in 2023, posting revenues of $790million, representing an uptick of 57% year on year.

In a conference call at the end of last week, DraftKings informed its investors that they expect to post a 2023 EBITDA (earnings before interest, taxes, depreciation, and amortization) loss of $105m on revenue of $3.695billion. Previous forecasts, however, suggested an EBITDA loss of $205m on revenue of $3.5billion.

What’s even more fascinating is that the gambling giant “outperformed” the rating on its shares, which initiated an increase on its price target from $38 to $42.

The stock pop suggests that DraftKings is well ahead of its competitors, and it resonates more with a younger audience, something which was pointed out by Chad Benyon, who works as a financial analyst for Macquarie.

He said: “DraftKings reported another strong revs/EBITDA beat and raise in 3Q, driven by iGaming share gains as the operator took the pole position for US online GGR in 3Q.

“During the quarter, DKNG experienced stronger retention/engagement, higher structural hold, and more efficient marketing/promo spend, partially offset by game outcomes given a tough year-on-year comp.

“We view DKNG as the best way to play the burgeoning US online market given its first-mover advantage, strong brand recognition with the younger demographic and superior tech.”

DraftKings only started trading as a public company on the New York Stock Exchange in April 2020, but it has enjoyed unprecedented growth over the past three-and-a-half years.

There is plenty going on behind the scenes at DraftKings, including the roll out of a new sports betting product later this month.

Indeed, DraftKings is always looking to move the needle as a technologically savvy operator, and who knows, double-digit revenue growth could be on the cards for the foreseeable future.