OTHER Influencing Factors for draftkings inc Earnings
earnings, DKNG mentioned that OSB, that's online sports betting, is only live
in 29 percent of the United States populations.
New York and with Louisiana happening this quarter, this is going to be less
than 45 percent. iGaming is only in 11 percent of the US population. Online
sports betting, if it's allowed in one state, it doesn't mean that iGaming,
which is online casino, is allowed.
Bowl won’t be reflected in the earnings released by DraftKings Inc on Feb. 18.
The Boston-based sports betting company is going all in on this year’s Super
Bowl, hoping to capture some of the record $7.6 billion that is expected to be
wagered on the big game between the Cincinnati Bengals and Los Angeles Rams.
had heavily promoted itself in the lead-up to the Super Bowl trying to draw in
gamblers with several promotions. The company is estimated to be giving away
$10 million in free bets and promotions to people who use its app to wager on
the game, including a $1 million grand prize.
is also one of only two gaming companies advertising during the Super Bowl. How
the aggressive promotions and advertising impact the company won’t be known
until its next earnings report.
stock may eventually transition into a viable discount – and some evidence
calls for that – you’ve got to focus on the immediate threat.
that threat is market panic, plain and simple. As you know, the Federal Reserve
is not really a friend of risk-on assets. Due to soaring consumer prices, the
central bank is worried about inflation spiraling out of control. Now, there’s
some debate about whether this inflation is due to the unique disruptions of
the coronavirus pandemic or something more deeply ingrained.
Federal Reserve pivoting toward a hawkish monetary policy, it doesn’t make
sense for many investors to hold onto something like DKNG stock.
comes to any national endeavor, you cannot ignore the Golden State. Obviously,
it’s the biggest economic engine for the U.S. If California were its own
country, it would represent the fifth largest economy in the world. Therefore,
it seems only reasonable that the state would legalize sports betting.
local Native American tribes have heavily contested new sports wagering
legislation, especially online wagering as it would not be under their direct
control. And that’s where the music might stop, no matter how glamorous
legalization would be.
it is somewhat difficult to believe that California will simply allow sports
betting to be the law of the land, knowing full well it could financially
disrupt Indigenous businesses.
has generated $822 million in revenue through the first three quarters of 2021
but spent $703 million on sales and marketing alone. Its total losses from
business operations in these three quarters are almost $1.2 billion, which
shows how far the company is from turning a profit.
hopes that acquired users will generate enough long-term value to grow revenue
while sales and marketing spending slows down over time. Tracking how revenue
grows versus sales and marketing expenses will be critical for investors over
analysts mostly expect DraftKings Inc to remain unprofitable until 2024,
according to Bloomberg consensus data. Additionally, Money MSN shows that on a
relative basis, the stock is still overvalued.
its price-to-sales (P/S) ratio is 28.7x compared to the Hotels &
Entertainment Services industry P/S ratio of only 3.6x. Meanwhile, the
price-to-book (P/B) ratio of DraftKings is 6.6x, compared to the P/B of 3.3x
for its industry.
Inc is a leading market share player in the very large and profitable sports
betting industry. It continues to be expensive, and its fundamentals have not
improved. It is losing money and burns cash.
other way of saying it, it’s been a rough old 12 months for DraftKings Inc. The
stock has shed 66% of its value as investors have fled from growth and
speculative assets to more safe havens.
Clark Lampen also thinks recent sentiment about the company and peers has “been
muted,” with some apparently worried certain states will shortly raise taxes
following NY’s launch of sports betting.
Lampen thinks other measures such as restrictions on marketing, or tighter
background checks are more likely. Interestingly, it is the former which the
analyst believes would be a “positive.” “Either way,” Lampen went on to add, “We expect DKNG to stay focused on growing
MUPs (monthly unique payers), given improving net CAC rates and signs that
smaller operators may be looking for exits.”
sticks with a Neutral (i.e. Hold) rating and no fixed price target in mind.