On November 4th, 2022, DraftKings released its earnings for Q3 2022 till September. The financials company reported remained more than expected citing good performance of the company and other growth factors. Despite the company’s performance better than estimates, DraftKings (DKNG) stock price did not show any optimism.
DraftKings Noted Impressive Earnings
Overall revenue for DraftKings during Q3 was impressive which is 502 million USD. The company did well in terms of quarterly revenue in comparison to Q3 2021 and revenue predictions for Q3 2022. Recent earnings are about 136% more than the earnings from last year’s third quarter were 213 million USD. While it also beat Wall Street’s forecast of 437 million USD.
Losses for the American betting company in recent quarters were also under control. For Q3 2021, the losses were 545 million USD and analysts also predicted it would stay somewhere the same. However, DraftKings reported a loss of 450 million for this quarter’s overall loss, which is less than both—the last year’s loss and recent predictions.
Analysts cited DraftKings’ specifications being the highest rated application along with a viable customer acquisition plan and many others while predicting its earnings. Rising revenue, encouraging data for NFL 2022 season, restrained amount of money spending on promotions etc. were also the reason for forecasters’ bullish view.
DraftKings stock was expected to witness an upsurge following the impressive earnings result but it did not go the same way.
Is Reported Unique Users Behind DraftKings Stock Price Drop?
One reason cited for DraftKings stock price tumble is unique users reported less than expected. The company reported adding about 1.6 million unique users on the platform which is a significant increase of 22% from last year’s quarter. The prediction for the users was to go up to 2 million users and the reported users were evidently less.
At the press time, DraftKings stock price is 11.31 USD with a significant drop of more than 27% from yesterday.
Apart from unique users, the fantasy sports company did well on various factors. Recently it also updated its revenue guidance by increasing it from 2.08 billion USD and 2.18 billion USD earlier to 2.16 billion USD and 2.19 billion USD for the ongoing year.
Company Stays Strong
DraftKings is one among the leading sports fantasy and betting companies in the United States. It held an overall valuation of 5.86 billion USD by the end of last year.
In September, the company launched Sportsbook in Kansas. Following the launch, it is available live across 18 states with a mobile sport betting facility. It is already operating within 18 states and also anticipates to spread in Maryland, Rico, Ohio, Maryland and several others.
Meanwhile the deal between ESPN and DraftKings is also said to be around the corner. The deal was announced in September 2020 and the instance boosted the DraftKings stock price about 17% in a day. Now when the deal is soon to lock, investors might be looking at DKNG stock as an opportunity once again.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational ideas only, and they do not establish the financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2022/11/05/draftkings-stock-price-drops-despite-earnings-release/