DraftKings (DKNG) closed at $41.32 in the latest trading session, marking a -1.6% move from the prior day. The stock trailed the S&P 500, which registered a daily gain of 0.48%. On the other hand, the Dow registered a loss of 0.02%, and the technology-centric Nasdaq increased by 0.94%.
Shares of the company have appreciated by 22.35% over the course of the past month, outperforming the Consumer Discretionary sector's gain of 6.84%, and the S&P 500's gain of 5.13%.
The investment community will be closely monitoring the performance of DraftKings in its forthcoming earnings report. The company's earnings per share (EPS) are projected to be $0.44, reflecting a 266.67% increase from the same quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $1.39 billion, indicating a 26.17% increase compared to the same quarter of the previous year.
DKNG's full-year Zacks Consensus Estimates are calling for earnings of $1.46 per share and revenue of $6.27 billion. These results would represent year-over-year changes of +239.05% and +31.46%, respectively.
It is also important to note the recent changes to analyst estimates for DraftKings. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 10.62% higher within the past month. As of now, DraftKings holds a Zacks Rank of #3 (Hold).
In the context of valuation, DraftKings is at present trading with a Forward P/E ratio of 28.83. This indicates a premium in contrast to its industry's Forward P/E of 21.55.
We can additionally observe that DKNG currently boasts a PEG ratio of 0.55. 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. DKNG's industry had an average PEG ratio of 1.61 as of yesterday's close.
The Gaming industry is part of the Consumer Discretionary sector. With its current Zacks Industry Rank of 149, this industry ranks in the bottom 40% of all industries, numbering over 250.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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DraftKings Inc. (DKNG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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