DraftKings (NASDAQ:DKNG) DraftKings shares surged Friday after the sports betting company posted fourth-quarter results that beat expectations. The company reported a loss of 53 cents per share on revenue of $855 million. Analysts polled by Refinitiv had anticipated a loss of 59 cents per share on revenue of $800 million.
Analysts have weighed in. In general, the focus is on the strong growth trends for DraftKings heading into 2023 and the focus to hit EBITDA profitability by 2024.
BTIG upgraded DraftKings to a Buy rating from Hold.
Jefferies kept a Buy rating in place and noted the quarter demonstrated DKNG's management stated intention to inject appropriate fiscal prudence into its still aggressive growth strategies.
Roth MKM analyst Edward Engel noted investors were expecting some degree of a Q4 beat and 2023 guidance lift, but added that the earnings results were even better than what the bulls were hoping for.
Piper Sandler called the DraftKings results well ahead of consensus marks with top-line upside driven by a better-than-expected sports book hold, customer retention trends and monetization. The firm kept an Overweight rating in place.
Morgan Stanley said the beat-and-raise along with existing states hitting profitability reinforces the bull case. The company is proving out the path to profitability outlined in our initiation and outlook which should drive a re-rating on an absolute basis as well as decoupling from unprofitable growth stocks," updated analyst Thomas Allen. The firm has an Overweight rating on DKNG and price target of $20.
Shares of DKNG rose $2.86, or 16.1%, early Friday to $20.67.
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