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DraftKings Stock Slides as Third-Quarter Results Miss Estimates

DraftKings shares slide as the online betting company misses Wall Street's third-quarter expectations.

DraftKings  (DKNG) - Get DraftKings Inc Class A Report struck out with investors Friday after the online sports betting company posted a wider-than-expected third-quarter loss and missed Wall Street's revenue expectations.

Shares of the Boston company at last check fell 4.1% to $42.83.

DraftKings posted a quarterly loss of $1.35 a share, wider than the loss of $1.11 a share of the year-earlier quarter. Revenue totaled $213 million, up 60% from a year earlier.

 Analysts surveyed by FactSet were expecting the company to post a loss of 98 cents a share on $236.9 million of revenue.

Monthly unique payers increased 31% and average revenue per monthly unique payer grew 38%.

DraftKings increased the midpoint of its fiscal year 2021 revenue guidance to $1.26 billion. It narrowed the guidance range to between $1.24 billion and $1.28 billion from between $1.21 billion and $1.29 billion. 

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The company said its guidance now equates to year-over-year growth of 93% to 99%.

DraftKings introduced 2022 revenue guidance of $1.7 billion to $1.9 billion, or 43% year-over-year growth based on the midpoints of the company’s 2021 revenue guidance range and 2022 revenue guidance range. 

The FactSet consensus for 2021 revenue is $1.29 billion, while the 2022 consensus total is $1.8 billion.

Roth Capital analyst Edward Engel had warned on Tuesday that it was "becoming increasingly clear" that DraftKings is poised for a Q3 miss and "underwhelming" 2021 guidance.

He said that Q2 and Q3 are DraftKings' "seasonally weakest quarters from a market share perspective." 

On Thursday the National Basketball Association unveiled an expanded multiyear relationship with DraftKings. 

Under the expanded arrangement, DraftKings will become the exclusive presenting sponsor of NBABet Stream, the league’s betting-focused telecast.