DraftKings (DKNG) Q3 earnings report preview: what to look for

What happened

DraftKings is scheduled to report its third-quarter earnings this Thursday after the market closes. Analysts expect revenue to grow 21.3% year over year; last quarter, revenue was $1.44 billion, down 4.6%, and the company missed analysts’ revenue, EBITDA and earnings-per-share estimates.

Confirmed

Global impact / market context

The report will show whether DraftKings can deliver the expected revenue growth after last quarter’s decline and estimate misses. Revenue strength could indicate that user activity is translating into sales, while another shortfall could raise questions about growth and the company’s ability to meet expectations.

Analyst inference

Analysts generally reaffirmed their estimates over the past 30 days, suggesting little change in their expectations. DraftKings has missed revenue estimates multiple times in the last two years, while some gaming peers have already reported results, offering limited comparison for the quarter.

Confirmed

What to watch

1. Check reported revenue against the expected 21.3% year-over-year growth; a miss would show that sales are not keeping pace with analysts’ current forecast. Analyst inference
2. Review EBITDA, a measure of operating performance before interest, taxes, depreciation and amortization, and earnings per share against analyst estimates. Analyst inference
3. Compare user numbers with the reported 3.6 million last quarter and 9.1% annual growth to assess whether the customer base is expanding. Analyst inference

Evidence

• stockstory.org