DraftKings (NASDAQ: DKNG) is joining a list of gaming equities that had an upside on Thursday. This is a good sign for investors waiting for the second-quarter earnings report on Friday.
This will be the fifth earning of the Boston-based sportsbook operator since going public. Analysts are expecting the company to lose 58 cents per share which is about $247.22 million. The loss forecast is not surprising given that DraftKing is yet to become profitable.
In May, DraftKings was estimated to make $1.05 to $1.15 billion in sales, an increase from an earlier $900 million to $1 billion estimate. Though there are some worries that DraftKings stock is unlikely to excite Wall Street investors due to the March decline, some analysts believe that DraftKings can recover faster than expected due to the nationwide rollout of sports betting.
Bank of America analyst Shaun Kelley noted that a portion of DraftKings is likely to recover faster than expected as more customers become familiar with products.
“While a portion of this growth is likely coming from pull-forward and faster than expected adoption, we do expect continued growth of these higher base levels as customer’s familiarity, products, and in-play betting adoption all remain in their infancy.”
DraftKings is operational in 11 states, analysts also expected management to launch mobile sports in other states. Kelley added that DraftKings is bound for more growth due to its US sports betting size. However, there are fears the DraftKings will not remain the only sports betting name in the US for longs.
MGM Resorts International, Caesars Entertainment is planning to have a share of the US sports betting market. Caesar is spending $1 billion to bolster its iGaming and sports wagering. MGM is also rapidly gaining access to market segments across the US.