DraftKings Earnings Day: Which Story Will the Market Buy on Friday?

DraftKings Earnings Day: Which Story Will the Market Buy on Friday? article feature image
Credit:

Rich Graessle/Icon Sportswire via Getty Images. Pictured: Citizens Bank Park.

Friday is earnings day for DraftKings, which means it’s time for a game: Which story will the market buy?

On one hand, DraftKings told the upbeat story of a quarter with two million monthly active users, up 29 percent year over year versus the first quarter of 2021. Those monthly active users spent 11 percent more than they did last year.

The second-largest sportsbook in the U.S., which is now live in 17 states representing 36 percent of the U.S. population, also raised revenue guidance to reflect at least 49 percent same-state growth year over year to at least $1.95 billion.

The must-have app for bettors

The best betting scoreboard

Free picks from proven pros

Live win probabilities for your bets

On the other hand, DraftKings' net loss on the quarter widened by 35 percent to $467 million. The story they’ve told is that they can be profitable at any time should they choose not to invest in new states and when they do invest in new states, they can become profitable within three years.

There’s also the story of them branching out to collectibles, especially NFT’s, which has been extremely positive for returns so far, but there’s unprecedented pressure on the market that appears to be reaching its saturation point.

While sports gambling stocks have largely suffered this year, DraftKings has, for some reason, turned into the poster boy. Heading into Friday morning, shares were down 72 percent over the last year to $14.44 and at risk of touching all time lows with a bad day.

How would you rate this article?

This site contains commercial content. We may be compensated for the links provided on this page. The content on this page is for informational purposes only. Action Network makes no representation or warranty as to the accuracy of the information given or the outcome of any game or event.