DraftKings (DKNG) ended the recent trading session at $36.50, demonstrating a -3.9% change from the preceding day's closing price. The stock's performance was behind the S&P 500's daily loss of 1.13%. At the same time, the Dow lost 1.79%, and the tech-heavy Nasdaq lost 1.3%.
Heading into today, shares of the company had gained 3.74% over the past month, outpacing the Consumer Discretionary sector's gain of 3.54% and the S&P 500's gain of 3.55%.
The investment community will be paying close attention to the earnings performance of DraftKings in its upcoming release. The company's upcoming EPS is projected at $0.4, signifying a 233.33% increase compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $1.38 billion, showing a 25.37% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $1.4 per share and revenue of $6.27 billion, which would represent changes of +233.33% and +31.61%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for DraftKings. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. DraftKings is currently sporting a Zacks Rank of #3 (Hold).
From a valuation perspective, DraftKings is currently exchanging hands at a Forward P/E ratio of 27.13. This signifies a premium in comparison to the average Forward P/E of 18.86 for its industry.
We can additionally observe that DKNG currently boasts a PEG ratio of 0.52. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Gaming industry was having an average PEG ratio of 1.54.
The Gaming industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 137, putting it in the bottom 45% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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DraftKings Inc. (DKNG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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