The first-quarter estimates for DraftKings Inc
This comes amid a pair of U.S. senators pushing to prohibit entities regulated by the Commodity Futures Trading Commission, including prediction-market exchanges, from listing contracts related to sporting events.
The DraftKings Analyst: Lampen reiterated a Buy rating and price target of $35.
The DraftKings Thesis: "The key driver of our EBITDA reduction is the Arkansas launch and initial revenue drag from promotional costs," Lampen wrote in the note.
The mode update also reflects recent state data trends showing lower sportsbook handle, the analyst stated.
The new estimates reflect a slight increase in promotions through the early phases of March Madness, he added.
"Zooming out, we'd note that while the March handle comp is tougher vs. Jan/Feb, the GGR comp is ~500 bps easier vs. a very player-friendly March Madness '25 stretch," Lampen said.
He reduced the first-quarter revenue and EBITDA estimates from $1.659 billion to $1.606 billion and from $186 million to $154 million, lower than consensus forecasts of $1.665 billion and $180 million, respectively.
DKNG Price Action: Shares of DraftKings had risen by 4.39% to $24.71 at the time of publication on Monday.
