DraftKings tipped for revenue growth despite Q4 setbacks

US gambling heavyweight DraftKings has been tipped to reach $6.4 billion in revenue this year, despite sports results impacting its figures in the fourth quarter of last year. 

JPMorgan analyst Joseph Greff set out his revenue estimates after the company reduced its expectations for the recent period. 

He has predicted the sportsbook and fantasy sports service provider will return a revenue figure of just under $1.4 billion, down from an initial forecast of $1.5 billion.

Similarly, cash flow expectations have been lowered by $100 million to $68 million.

The change in outlook was prompted by DraftKings official estimates that it would file revenue figures $275 million below its target due to sports results favoring its user base with wagers on the outcomes of games.

This situation was reflected in December when DraftKings held on to 7% of bets, under the industry average of 7.2%. 

So…remember that whole DraftKings/Hermalyn/Fanatics VIP case I was kinda covering for a bit? Well, you can forget about it because it settled CONFIDENTIALLY. pic.twitter.com/ezcN9cloJx

— Paul Lesko (@Paul_Lesko) December 27, 2024

However, Greff has not budged from his prediction that DraftKings is in line to see growth in the new year. 

The analyst has slated the firm to rake in $6.4 billion this year, 35% more than last year while predicting further revenues of $7.3 billion in 2026. 

He has stated that cash flow will rise to $950 million in 2025 and $1.5 billion the following year, with DraftKings capitalizing on its strong market position and leverage, to outperform smaller competitors in the U.S.

On TipRanks, Greff is a 4-star analyst with an average return of 7.5% and a 50.00% success rate. 

DraftKings is on a solid footing with $1.7 billion in the bank and $500 million more in available credit, while the company has reportedly reached a settlement with a former executive accused of taking trade secrets when he left the company. 

According to Reuters, Michael Hermalyn allegedly used confidential information to help Fanatics get its VIP client services team off the ground.

Image credit: Via Unsplash

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