DraftKings (NASDAQ:DKNG) Issues Quarterly Earnings Results, Misses Expectations By $0.02 EPS

by · The Cerbat Gem

DraftKings (NASDAQ:DKNG – Get Free Report) released its quarterly earnings data on Friday. The company reported $0.20 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.22 by ($0.02), Briefing.com reports. The company had revenue of $1.65 billion during the quarter, compared to analyst estimates of $1.63 billion. DraftKings had a net margin of 0.93% and a return on equity of 12.71%. The business’s revenue was up 16.8% on a year-over-year basis. During the same quarter in the prior year, the company earned ($0.07) EPS.

Here are the key takeaways from DraftKings’ conference call:

  • Q1 outperformed expectations and guidance was reaffirmed: revenue rose 17% YoY to >$1.6B and adjusted EBITDA increased 64% YoY to $168M, with positive net income for a second consecutive quarter and ~$100M of share repurchases.
  • DraftKings plans a sizeable push into predictions (Pick6) with $200M–$300M of investment this year, primarily marketing and product/tech spend, which management says the core business can fund but will affect near‑term allocation of capital.
  • Early predictions traction and market-making look promising: April CACs dropped >80%, annualized predictions consumer volume exceeded $1B (total volume >$2.3B), market-making is already profitable, and a proprietary exchange plus “combos” are launching soon.
  • Core Sportsbook momentum and margin improvement: Sportsbook revenue grew 24% YoY to $1.1B, net revenue margin rose 140 bps to 7.8%, parlay mix increased, and April soft-close showed +22% revenue and >$100M adjusted EBITDA for the month.
  • Regulatory and consumer‑protection risks tied to predictions: third‑party data and company comments indicate predictions customers are losing faster than sportsbook customers, which could invite regulatory scrutiny or require stricter safeguards that slow monetization.

DraftKings Price Performance

NASDAQ:DKNG traded up $0.30 during mid-day trading on Friday, hitting $25.52. The company’s stock had a trading volume of 28,551,779 shares, compared to its average volume of 11,618,338. The company has a current ratio of 1.03, a quick ratio of 1.03 and a debt-to-equity ratio of 2.91. The stock has a fifty day moving average of $23.56 and a 200-day moving average of $28.48. DraftKings has a fifty-two week low of $20.46 and a fifty-two week high of $48.78. The company has a market capitalization of $12.65 billion, a price-to-earnings ratio of 425.33, a P/E/G ratio of 1.19 and a beta of 1.67.

Insider Transactions at DraftKings

In other DraftKings news, Director Jocelyn Moore sold 2,150 shares of DraftKings stock in a transaction that occurred on Friday, March 13th. The shares were sold at an average price of $25.60, for a total value of $55,040.00. Following the transaction, the director owned 1,406 shares of the company’s stock, valued at approximately $35,993.60. The trade was a 60.46% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through the SEC website. Also, insider Paul Liberman sold 484,417 shares of the stock in a transaction on Wednesday, March 11th. The stock was sold at an average price of $25.16, for a total transaction of $12,187,931.72. Following the transaction, the insider owned 213,597 shares of the company’s stock, valued at $5,374,100.52. The trade was a 69.40% decrease in their position. The SEC filing for this sale provides additional information. Over the last quarter, insiders sold 496,718 shares of company stock valued at $12,477,308. 47.18% of the stock is owned by company insiders.

Institutional Trading of DraftKings

Several institutional investors have recently added to or reduced their stakes in DKNG. Viking Global Investors LP acquired a new position in DraftKings during the third quarter worth $561,125,000. AQR Capital Management LLC grew its holdings in shares of DraftKings by 41.0% in the fourth quarter. AQR Capital Management LLC now owns 16,474,009 shares of the company’s stock valued at $567,694,000 after acquiring an additional 4,788,337 shares in the last quarter. Cadian Capital Management LP increased its position in shares of DraftKings by 297.8% during the fourth quarter. Cadian Capital Management LP now owns 5,524,221 shares of the company’s stock valued at $190,365,000 after acquiring an additional 4,135,461 shares during the last quarter. Spruce House Investment Management LLC raised its stake in shares of DraftKings by 1,301.3% during the 4th quarter. Spruce House Investment Management LLC now owns 4,203,834 shares of the company’s stock worth $144,864,000 after purchasing an additional 3,903,834 shares during the period. Finally, ARK Investment Management LLC raised its position in DraftKings by 32.0% in the fourth quarter. ARK Investment Management LLC now owns 4,540,766 shares of the company’s stock worth $156,475,000 after acquiring an additional 1,101,850 shares during the period. 37.70% of the stock is currently owned by institutional investors.

Analysts Set New Price Targets

Several analysts recently commented on the stock. Weiss Ratings reiterated a “sell (d-)” rating on shares of DraftKings in a research note on Wednesday, January 21st. Truist Financial dropped their price target on DraftKings from $33.00 to $30.00 and set a “buy” rating for the company in a research note on Tuesday, April 21st. Scotiabank raised DraftKings to an “outperform” rating in a research report on Friday, April 24th. BMO Capital Markets lifted their price target on shares of DraftKings from $42.00 to $50.00 and gave the stock an “outperform” rating in a research note on Tuesday, March 3rd. Finally, Moffett Nathanson downgraded shares of DraftKings from a “buy” rating to a “neutral” rating and reduced their price target for the stock from $38.00 to $27.00 in a research report on Friday, April 24th. Twenty-seven research analysts have rated the stock with a Buy rating, eight have assigned a Hold rating and two have assigned a Sell rating to the company. According to data from MarketBeat, DraftKings presently has an average rating of “Moderate Buy” and a consensus target price of $34.66.

Read Our Latest Stock Analysis on DraftKings

DraftKings News Roundup

Here are the key news stories impacting DraftKings this week:

DraftKings Company Profile

(Get Free Report)

DraftKings Inc is a leading digital sports entertainment and gaming company specializing in daily fantasy sports, sports betting and iGaming products. The company provides an integrated platform where users can participate in daily fantasy contests, place wagers on professional sports events, and enjoy a range of online casino-style games. DraftKings’ proprietary technology supports real-time odds, live scoring and advanced analytics to enhance the user experience across mobile and desktop applications.

Founded in 2012 by co-founders Jason Robins, Matthew Kalish and Paul Liberman, DraftKings began as a daily fantasy sports provider and rapidly expanded into regulated sports betting following legislative changes in the United States.

Featured Stories