DraftKings extends slide after Q1 hit, and raised revenue guidance for 2021

Date published: May 7, 2021, 08: 28 hrs.

Last updated: May 7, 2021, 10: 04 h.

Shares in DraftKings (NASDAQ: DKNG) are trading lower early Friday after the bookmaking operator reported better-than-expected first-quarter results while raising 2021 revenue guidance.

The Boston-based company said it lost 36 cents a share on revenue of $312 million for the first three months of the year. Analysts had expected a loss of 45 cents on $ 237. 02 million sales. Monthly unique players (MUP) increased 114 percent, while MUP spending was 61, a 48 percent year-over-year increase. Despite these impressive numbers, DraftKings is off 1. 55 percent in early trading , extending a slide of 28 . 43 percent over the past month, one used down 30 percent from March's highs .

This MUP spending exceeds the consensus estimate of 47, and DraftKings raised its 2021 revenue forecast to $1. 05 billion to $1. 15 billion from previous guidance of $900 billion to $1 billion. Analysts are expecting $1. 05 billion.

Growth reflects strong results in the first quarter of 2021, continued strong user activation due to the effectiveness of our marketing spend, well-executed mobile sports betting and iGaming launches in Michigan and mobile sports betting in Virginia, and modest contributions from our recently completed acquisitions, " the company said in a statement.

DraftKings adds the 2021 revenue forecast is for the states it currently operates in, assumes no departures from those states, and the national collegiate and professional sports calendars will not be dramatically altered.

Sports betting, iGaming in the spotlight

Many of the near- to mid-term theses for DraftKings stock involve the expansion of online casinos and online sports betting, which means the stock is vulnerable to political and tailwinds.

DraftKings now offers online sports betting in more than a dozen states, covering a quarter of the US population. This comes after the introduction of mobile sports betting and iGaming in Michigan and mobile sports betting in Virginia between January and March. Its online casino platform operates in four states, representing 10 percent of the population.

"In 2021, 25 state legislatures introduced legislation to legalize mobile sports betting, five state legislatures introduced legislation to expand the existing sports betting framework, and one state legislature introduced legislation to legalize sports betting limited to retail outlets, "the company says. "In addition, four states have introduced iGaming legislation and three states have introduced online poker legislation."

Already this year, Arizona, New York and Wyoming have enacted mobile sports betting legislation.

DraftKings still has DFS leverage

Since iGaming and regulated sports betting are the shiny new objects in the gaming and investment world, it's not surprising that some novice investors may forget how DraftKings got its start.

It's daily fantasy sports (DFS). It's been nearly a decade since DraftKings pioneered DFS - a status it leveraged into sports betting success - and the segment continues to grow.

For example, the operator said entry fees for this year's Super Bowl were up 66 percent, while the number of active users of the event was up 60 percent.