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DraftKings (DKNG) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·2 min read

In the latest trading session, DraftKings (DKNG) closed at $48.65, marking a +1.19% move from the previous day. This move outpaced the S&P 500's daily gain of 0.34%.

Heading into today, shares of the company had lost 20.42% over the past month, lagging the Consumer Discretionary sector's loss of 2.36% and the S&P 500's loss of 0.12% in that time.

Investors will be hoping for strength from DKNG as it approaches its next earnings release. In that report, analysts expect DKNG to post earnings of -$1.05 per share. This would mark a year-over-year decline of 7.14%. Our most recent consensus estimate is calling for quarterly revenue of $223.05 million, up 67.91% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of -$3.15 per share and revenue of $1.27 billion. These totals would mark changes of -14.13% and +106.15%, respectively, from last year.

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It is also important to note the recent changes to analyst estimates for DKNG. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.44% higher within the past month. DKNG is currently sporting a Zacks Rank of #2 (Buy).

The Gaming industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 179, which puts it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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Zacks Investment Research