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DraftKings (DKNG - Free Report) is set to report second-quarter 2023 results on Aug. 3.

The Zacks Consensus Estimate for revenues is pegged at $762.25 million, indicating an increase of 63.51% from the year-ago quarter’s levels.

The consensus mark for loss has moved south by 4 cents in the past 30 days and is currently pegged at 25 cents per share.

The company’s earnings beat the Zacks Consensus Estimate in three of the last trailing four quarters. DraftKings has a trailing four-quarter earnings surprise of 15.31%, on average.

Let’s see how things have shaped prior to this announcement.
 

DraftKings Inc. Price and EPS Surprise

DraftKings Inc. price-eps-surprise | DraftKings Inc. Quote
 

Factors to Consider

Increasing global demand for online gambling and sports betting is expected to have positively impacted DraftKings’ second-quarter performance.

In the first quarter, the company successfully introduced mobile sports betting services in both Ohio and Massachusetts. The company has managed to capture 7% of the adult population in Ohio and 6% in Massachusetts. This trend is likely to have positively impacted the top line in the quarter to be reported.

DKNG’s continuous efforts to expand the functionality and content offering of its Sportsbook product are expected to have driven customer acquisition, engagement, and retention in the to-be-reported quarter.

In the first quarter, Average Revenue per Monthly Unique Payers was $92, up 37.3% year over year, attributed to an improvement in the company’s structural sportsbook hold rate, a continued mix shift into DraftKings’ Sportsbook and iGaming products, and reduced promotional intensity compared with the year-ago period. The trend is likely to have continued in the to-be-reported quarter.

The demand for iGaming, such as Roulette and Blackjack, benefited from a spike in user activity. The trend is expected to have continued in the to-be-reported quarter.

The company expects to break even on an adjusted EBITDA basis in the second quarter, supported by fixed costs that are projected to only grow at a single-digit rate year over year during the quarter.

DraftKings’ standalone horse racing app is available to residents of 15 states. This application is expected to have positively impacted the top-line performance of the to-be-reported quarter.
 

What Our Model Says

Our proven model predicts an earnings beat for DraftKings this time around. Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat.

DraftKings currently has an Earnings ESP of +6.60% and carries a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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