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What made DraftKings stock tank 25% on Friday?

DraftKings Inc (NASDAQ: DKNG) reported better-than-expected results for its fiscal third quarter on Friday and issued encouraging guidance for the future. Shares still tanked nearly 25%.

Why is DraftKings stock down this morning?

Investors are primarily concerned about the number of monthly unique players that came in well below the FactSet consensus.

DraftKings ended the quarter with 1.6 million versus 1.82 million expected. Still CEO Jason Robins said in the earnings press release:

Throughout 2022, we’ve struck the right balance between delivering top-line growth and driving operating efficiencies. We continue to be confident that we’ll achieve positive adjusted EBITDA in Q4 of 2023.

Heading into the stock market news, Wall Street had a consensus “overweight” rating on the DraftKings stock.

DraftKings Q3 earnings snapshot

Lost $450.5 million versus the year-ago $545 million
Adjusted per-share loss narrowed from 82 cents to 62 cents
Revenue shot up 136% year-over-year to $502 million
Consensus was 86 cents loss on $439 million in revenue

Last month, Invezz reported that DraftKings was near a significant deal with Disney’s ESPN.

DraftKings stock down despite raised guidance

For the full financial year, DraftKings Inc now forecasts its revenue to fall in the range of $2.16 billion to $2.19 billion. In comparison, analysts had called for $2.14 billion. According to CFO Jason Park:

We’re increasing the midpoint of our FY22 EBITDA (adj) guidance by $10 million which is meaningful given prior guidance didn’t include our launch in Kansas on September 1st, or Q4 investments ahead of expected launches in Maryland and Ohio, pending licensure and regulatory approvals.

The sports betting company also offered insight into what it expects for 2023. DraftKings anticipated $2.80 billion to $3.00 billion in revenue next year – also ahead of experts at $2.83 billion.  

The post What made DraftKings stock tank 25% on Friday? appeared first on Invezz.

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