DraftKings Stock Falling Sharply Ahead of Earnings

DraftKings Inc (NASDAQ:DKNG) is scheduled to report second-quarter earnings after the close on Thursday, Aug. 6. According to Zacks Research, analysts expect earnings of $0.22 per share on revenue of $1.50 billion, representing a 42.1% year-over-year decline in earnings alongside a 0.8% dip in revenue. Investors will be watching for updates on sportsbook handle, online gaming trends, and management's full-year outlook after rival Flutter Entertainment (FLUT) trimmed its guidance.

DKNG was last seen down 8.0% at $21.75, selling off in sympathy with Flutter stock's 14% post-earnings drop. The shares are down 36.9% year to date and have shed 51.6% over the last 12 months, with the stock hovering near the lower end of its year-long trading range.

Options traders are pricing in a 13.4% post-earnings move, well above DraftKings stock's average post-earnings swing of 6.8% over the last eight quarters. The company has closed higher after four of its last seven quarterly reports, including a modest 1.2% gain in May after a 13.5% post-earnings drop in February.

Ahead of the event, short interest represents with 8.2% of DraftKings' available float sold short. It would take short sellers more than three days to cover their bearish bets, at the stock's average daily trading pace.