DraftKings Stock Forecast: DKNG drops 20%, may reach $15 after poor guidance
- DKNG plunges 20% at Friday open.
- DraftKings beat earnings expectations on EPS and revenue.
- DKNG reported $-0.35 non-GAAP EPS on $473 million in revenue.
DraftKings (DKNG) shares plunged as much as 20% on Friday after the betting site posted Q4 earnings that beat on top and bottom lines. However, the market seemed to focus on bigger than expected losses in 2022. DKNG shares circled around $18.30, a price last held in April 2020.
DraftKings News: major losses ahead
The entire problem is that DraftKings guided for higher than expected losses in 2022. 2021 losses came in at $676 million. The midpoint for management's guidance for 2022, however, is a loss of $875 million.
On the top and bottom lines, DKNG offered adjusted earnings per share of $-0.35 on $473 million in Q4 revenue. Wall Street had expected $-0.63 on $446 million. Draftkings made major moves in New York and Louisiania during the quarter and said it expects to make a profit in the fourth quarter of 2023.
DKNG key statistics
| Market Cap | $7.4 billion |
| Price/Earnings | N/A |
| Price/Sales | 8 |
| Price/Book | 5 |
| Enterprise Value | $6.2 billion |
| Operating Margin | -124% |
| Profit Margin |
-126% |
| 52-week high | $74.38 |
| 52-week low | $17.41 |
| Short Interest | 13% |
| Average Wall Street Rating and Price Target | Buy, $48.12 |
DraftKings Stock Forecast: heading to $15
The entire focus for traders interested in DKNG is $17.41. This is the prior range low. If DKNG breaks this level, then support will drop to $15 and $11. On the upside, the target is $25. This is the high from February 11 that coincides with the 50-day moving average.
DKNG 1-day chart
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Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
