Is DKNG Stock A Buy Right Now After Earnings Results?| Investor’s Business Daily

As sports-betting legalization spreads across U.S. states, DraftKings (DKNG) is at the forefront of the online betting industry. Amid a huge move since its April 2020 debut, is DKNG stock a buy?

The expanding legalization of digital sports betting is an emerging trend. The November election results showed voters in several states largely approved ballot measures that legalized sports betting and other gaming expansion measures.

Boston, Mass.-headquartered DraftKings is primed to take advantage of this burgeoning shift in state attitudes toward sports betting. DraftKings is an online sports platform that allows users to play daily fantasy games and win cash prizes.

DraftKings is on the road to profitability. After losing $3.95 a share in 2020, the company is expected to lose $3.60 per share in 2021 and $2.40 per share in 2022, according to IBD data.

DraftKings Stock Fundamental Analysis: Strong Revenue Growth

On Nov. 5, DraftKings missed Q3 earnings and revenue targets. The company lost an adjusted $1.35 per share on revenue of $212.8 million. Meanwhile, management boosted the midpoint of its revenue guidance for fiscal 2021 to $1.26 billion vs. the previous midpoint of $1.25 billion. Analysts have projected $1.29 billion. The company sees revenue between $1.7 billion and $1.9 billion for fiscal 2022.

CFO Jason Park said in a statement that revenue would have been $40 million higher if not for “lower-than-expected hold primarily due to unexpected NFL games outcomes.”

DraftKings IBD Stock Ratings

As a result of the company’s lack of profitability, DraftKings’ EPS Rating is a weak 23 out of a best-possible 99. The EPS Rating measures a company’s ability to grow profits year over year, using the most recent two quarters and the past three to five years of earnings growth.

According to the IBD Stock Checkup, DKNG stock shows a weak 16 out of a perfect 99 IBD Composite Rating. The Composite Rating helps investors easily measure a stock’s fundamental and technical metrics.