DraftKings (DKNG) delivered solid second-quarter results that featured strong growth in revenue and active customers. Buoyed by the impressive performance, management also raised the full-year outlook for revenue in anticipation of robust growth.
While the company did post a net loss of $0.26 a share, it was much better than the net loss of $0.52 that analysts expected. Additionally, revenue increased 320% year-over-year to $298 million, easily beating consensus estimates of $242.4 million.
The massive revenue growth came on the back of unique monthly payers growth of 281% year-over-year. Also, average revenue per monthly unique payer surged 26% to $80.
During the quarter, the company expanded into new areas of growth, including media and NFTs. “We believe these expansion opportunities will enable us to further grow our customer base and generate additional revenues through cross-selling to our existing players,” said CEO Jason Robins. (See DraftKings stock charts on TipRanks)
Encouragingly, DraftKings raised the revenue guidance for the year, which is now expected to range from $1.21 billion to $1.29 billion, up from the initial guidance range of $1.05 billion to $1.15 billion. The new guidance reflects an 88% to 100% year-over-year gain.
In response to the second-quarter earnings report, Craig-Hallum analyst Ryan Sigdahl reiterated a Buy rating on the stock with a $60 price target, implying 16.3% upside potential to current levels.
According to Sigdahl, DraftKings continues to execute well on its vertical integration and product offerings. Therefore, the analyst expects the stock to edge higher given the string of upcoming catalysts, including multiple state launches, accelerated product enhancement, and a potential New York License.
The consensus rating is a Moderate Buy based on 11 Buys and 5 Holds. The average DraftKings price target of $64.28 implies 24.6% upside potential to current levels.
Meanwhile, DKNG scores a 4 out of 10 from TipRanks’ Smart Score rating system, suggesting that the stock is likely to perform in line with market averages.
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