DraftKings Inc. DKNG is scheduled to report fourth-quarter 2024 results on Feb. 13, after the closing bell. In the last reported quarter, the company registered an earnings miss of 42.9%.

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DKNG’s Estimates Trend

The Zacks Consensus Estimate for fourth-quarter adjusted loss per share has widened to 19 cents from 17 cents in the past 30 days. In the prior-year quarter, the company had reported an adjusted loss per share of 10 cents. For revenues, the consensus mark is pegged at $1.41 billion, indicating a 14.9% year-over-year increase.

What Might Have Shaped DKNG’s Q4 Results?

DraftKings’ fourth-quarter top line is likely to have been aided by a surge in new online sportsbook and iGaming users, with it maintaining strong customer-acquisition momentum. The steady rise in Monthly Unique Payers is likely to have supported revenue growth, reinforcing its expanding market presence. The integration of Jackpocket has played a key role in broadening DraftKings’ reach, offering cost-effective customer acquisition and opening up new cross-selling opportunities.

To stay ahead of competitors, DraftKings has been refining its product lineup with innovative features like in-house player prop wagers and progressive parlays, attracting more users to Sportsbook platform. Additionally, the company is likely to have benefited from lower customer-acquisition costs, enhancing its profitability over time. However, despite efficient user growth, marketing expenses are likely to have remained elevated due to continued investment in the Jackpocket brand, which might have pressured adjusted EBITDA.

Furthermore, rising sportsbook tax rates in key states such as Illinois, New York and Pennsylvania might have weighed on DraftKings’ bottom line, adding to cost pressures despite the overall business expansion.

What Does the Zacks Model Unveil for DKNG?

Our proven model predicts an earnings beat for DraftKings this time around. 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. This is exactly the case here.

DKNG’s Earnings ESP: DraftKings has an Earnings ESP of +21.76% at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank of DKNG: The company carries a Zacks Rank #3 at present. Other

Other Stocks to Consider

Here are some other stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these, too, have the right combination of elements to deliver an earnings beat this time around.

Life Time Group Holdings, Inc. LTH has an Earnings ESP of +14.29% and a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

LTH is expected to register a 10.5% increase in earnings for the to-be-reported quarter. It reported earnings beats in three of the trailing four quarters and missed on one occasion, with an average surprise of 46.2%.

Trip.com Group Limited TCOM currently has an Earnings ESP of +0.97% and a Zacks Rank of 1.

TCOM reported earnings beats in each of the trailing four quarters, with an average surprise of 42.8%. Its earnings for the to-be-reported quarter are expected to decrease 7.1%.

Rush Street Interactive, Inc. RSI currently has an Earnings ESP of +22.22% and a Zacks Rank of 1.

RSI’s earnings for the to-be-reported quarter are expected to increase 800%. It reported earnings beats in each of the trailing four quarters, the average surprise being 225%.

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DraftKings Inc. (DKNG) : Free Stock Analysis Report

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Life Time Group Holdings, Inc. (LTH) : Free Stock Analysis Report

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