DraftKings (DKNG) ended the recent trading session at $40.51, demonstrating a +2.3% change from the preceding day's closing price. This change outpaced the S&P 500's 0.22% loss on the day. Meanwhile, the Dow gained 0.08%, and the Nasdaq, a tech-heavy index, lost 0.51%.
The company's shares have seen an increase of 13.56% over the last month, surpassing the Consumer Discretionary sector's loss of 0.1% and the S&P 500's gain of 0.45%.
Analysts and investors alike will be keeping a close eye on the performance of DraftKings in its upcoming earnings disclosure. The company is forecasted to report an EPS of $0.4, showcasing a 233.33% upward movement from the corresponding quarter of the prior year. Meanwhile, our latest consensus estimate is calling for revenue of $1.38 billion, up 25.37% from the prior-year 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's also important for investors to be aware of any recent modifications to analyst estimates for DraftKings. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. As of now, DraftKings holds a Zacks Rank of #3 (Hold).
With respect to valuation, DraftKings is currently being traded at a Forward P/E ratio of 28.29. Its industry sports an average Forward P/E of 19.18, so one might conclude that DraftKings is trading at a premium comparatively.
We can also see that DKNG currently has a PEG ratio of 0.54. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Gaming industry currently had an average PEG ratio of 1.55 as of yesterday's close.
The Gaming industry is part of the Consumer Discretionary sector. Currently, this industry holds a Zacks Industry Rank of 97, positioning it in the top 40% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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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