You’d have to look far and wide to find an area of Wall Street not rattled by tariffs or Trump trade. But some sectors are at least insulated, for now, from the coming storm. One stock to watch these week is sports betting giant DraftKings Inc (NASDAQ:DKNG).DraftKings reports fourth-quarter earnings after the close Thursday, Feb. 13. For a company stalled by profitability until only recently, DKNG has a stellar history of post-earnings moves. After the last eight reports, DraftKings has moved higher after ...

Core Viewpoint - DraftKings Inc. is set to report its fourth-quarter 2024 results on February 13, with expectations of a wider adjusted loss per share and a significant year-over-year revenue increase driven by user growth and market expansion [1][2][3]. Group 1: Earnings Estimates - The Zacks Consensus Estimate for the fourth-quarter adjusted loss per share has widened to 19 cents from 17 cents over the past 30 days, compared to an adjusted loss per share of 10 cents in the same quarter last year [2]. - Revenue expectations are pegged at $1.41 billion, indicating a 14.9% year-over-year increase [2]. Group 2: Factors Influencing Q4 Results - The anticipated revenue growth is likely supported by a surge in new online sportsbook and iGaming users, along with strong customer-acquisition momentum [3]. - The integration of Jackpocket has broadened DraftKings' reach, providing cost-effective customer acquisition and new cross-selling opportunities [3]. - The company has been refining its product lineup with innovative features, which may have attracted more users to its Sportsbook platform [4]. Group 3: Cost and Tax Pressures - Despite user growth, marketing expenses are expected to remain elevated due to ongoing investments in the Jackpocket brand, potentially impacting adjusted EBITDA [4]. - Rising sportsbook tax rates in key states such as Illinois, New York, and Pennsylvania may have added cost pressures, affecting the bottom line [5]. Group 4: Earnings Prediction Model - The Zacks model predicts an earnings beat for DraftKings, supported by a positive Earnings ESP of +21.76% and a Zacks Rank of 3 (Hold) [6][7].

The Super Bowl is one of the most lucrative advertising events, with companies spending millions on commercial slots that last under just a minute.  The average cost for a 30-second Super Bowl ad in 2024 was roughly $7 million, with brands using this opportunity to generate brand awareness, boost overall consumer engagement, and show off new products.And for 2025, that price tag has gone up to roughly $8 million. Several companies, including DraftKings (DKNG) , could see a slight sales catalysts given its e ...

Core Points - DraftKings Inc. will release its fourth quarter and full year 2024 results on February 13, 2025, after market close [1] - A conference call and audio webcast will be held on February 14, 2025, at 8:30 a.m. ET to discuss the results and business performance [2] Company Overview - DraftKings Inc. is a digital sports entertainment and gaming company, established in 2012, and is headquartered in Boston [3] - The company operates as a vertically integrated sports betting operator in the U.S., with mobile and retail sports betting in 28 states, Washington, D.C., and Ontario, Canada [3] - DraftKings offers iGaming in five states and Ontario, and owns Jackpocket, the leading digital lottery app in the U.S. [3] - The daily fantasy sports product is available in 44 states and certain Canadian provinces [3] - DraftKings has partnerships with major sports leagues including the NFL, NHL, PGA TOUR, WNBA, UFC, NBA, and MLB [3] - The company is committed to responsible gaming and provides educational resources for players [3]

Group 1 - The Mega Millions jackpot of $112 million is the largest win ever recorded from a ticket ordered through a lottery courier app, specifically Jackpocket [1][2] - Jackpocket has established itself as the leading lottery courier service, with customers winning a total of 61 prizes of $1 million or more to date [2] - A significant shift towards digital lottery ticket purchasing is evident, with 40% of Americans participating in the lottery in the past six months using mobile apps or websites [3] Group 2 - Jackpocket is available in 19 jurisdictions, allowing users to order tickets for major lotteries like Powerball and Mega Millions, as well as local state lottery games [4] - The app also offers digital scratch-off tickets in select states, enhancing the convenience for lottery players [4][5] - Jackpocket is a subsidiary of DraftKings Inc., indicating a strategic alignment with a major player in the gaming industry [5]

Company Performance - DraftKings (DKNG) stock closed at $39.83, reflecting a +0.86% change from the previous day, outperforming the S&P 500's gain of 0.16% [1] - Over the past month, DraftKings stock has decreased by 0.98%, which is better than the Consumer Discretionary sector's decline of 5.64% and the S&P 500's drop of 2.2% [1] Upcoming Earnings - The upcoming earnings release for DraftKings is highly anticipated, with projected EPS at -$0.08, indicating a 20% increase year-over-year [2] - Revenue is expected to reach $1.5 billion, representing a 22.02% increase compared to the same quarter last year [2] Analyst Forecasts - Recent revisions to analyst forecasts for DraftKings are important, as they reflect changes in short-term business dynamics [3] - Positive estimate revisions indicate analyst optimism regarding the company's business and profitability [3] Zacks Rank and Performance - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), shows DraftKings currently holds a rank of 4 (Sell) [5] - The consensus EPS projection has decreased by 0.56% in the last 30 days [5] Valuation Metrics - DraftKings has a Forward P/E ratio of 94.69, significantly higher than the industry average of 17.23 [6] - The company also has a PEG ratio of 2.99, compared to the gaming industry's average PEG ratio of 2.04 [6] Industry Context - The Gaming industry, part of the Consumer Discretionary sector, ranks 61 in the Zacks Industry Rank, placing it in the top 25% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Viewpoint - The average brokerage recommendation (ABR) for DraftKings (DKNG) is 1.24, indicating a consensus leaning towards a "Strong Buy" [2]. However, the reliability of such recommendations is questioned due to potential biases from brokerage firms [5][9]. Group 1: Brokerage Recommendations - DraftKings has an ABR of 1.24, with 26 out of 31 recommendations classified as "Strong Buy" and 2 as "Buy," representing 83.9% and 6.5% of total recommendations respectively [2]. - Despite the favorable ABR, studies suggest that brokerage recommendations may not effectively guide investors towards stocks with the highest price increase potential [4]. - Brokerage analysts often exhibit a positive bias in their ratings due to vested interests, leading to a disproportionate number of "Strong Buy" recommendations compared to "Strong Sell" [5][9]. Group 2: Zacks Rank Comparison - The Zacks Rank, a proprietary stock rating tool, categorizes stocks from 1 (Strong Buy) to 5 (Strong Sell) and is based on earnings estimate revisions, which are more timely indicators of stock price movements [7][10]. - The Zacks Consensus Estimate for DraftKings has declined by 0.6% over the past month to -$0.83, reflecting analysts' growing pessimism about the company's earnings prospects [12]. - As a result of the recent changes in earnings estimates, DraftKings has received a Zacks Rank of 4 (Sell), suggesting caution despite the positive ABR [13].

Core Insights - December is a significant month for corporate spending, driven by a "use it or lose it" mentality among department heads, leading to increased expenditures in various sectors [1][2] - Companies like Cloudflare benefit from year-end spending as IT managers allocate excess budgets to software, resulting in a notable increase in stock prices during first-quarter earnings announcements [3][4] - Seasonal effects are prevalent in industries such as natural gas and retail, where companies experience predictable profit surges during specific times of the year [5][6] Group 1: Company-Specific Insights - Cloudflare Inc. (NET) is a leading cybersecurity firm that protects 80% of corporate and government websites from DDoS attacks, benefiting from increased spending during the fourth quarter [3][21][24] - Cheniere Energy Inc. (LNG) is the largest exporter of liquefied natural gas in the U.S., with stock prices rising 20.7% in the first two months of the year due to seasonal demand in Europe [10][12] - DraftKings Inc. (DKNG) experiences revenue boosts during major sporting events, with a historical 13% increase in share prices from January through mid-February [14][19] Group 2: Market Trends and Predictions - Analysts expect Cloudflare's revenues to rise by 23% this year, with net income projected to increase by 25% to $942 million, indicating strong fundamental performance [26] - DraftKings is anticipated to achieve over $1 billion in annual profits by 2027 as it transitions from user acquisition to monetization [19] - Seasonal investing strategies, such as those developed by TradeSmith, aim to identify optimal buying moments for high-quality companies, leveraging historical data and seasonal trends [7][29][30]

Group 1: Roku - Roku's stock price has significantly declined over the past three years, yet the company continues to grow its household user base at double-digit rates [2][3] - The number of streaming households increased by 13% year over year, surpassing 85 million in Q3, driven by consumers shifting from legacy TV to digital media [3] - Total streaming hours rose by 20%, reaching 32 billion, indicating high user engagement which attracts advertisers [4] - Roku's platform revenue, including advertising and premium subscriptions, grew 15% year over year to $908 million [4] - The gross profit margin improved from 48.1% in Q3 2023 to 54.2% in Q3 2024, with management focusing on further margin enhancement through new features and partnerships [5][6] Group 2: DraftKings - The online sports betting market is projected to reach $24 billion by 2029, positioning DraftKings to benefit from this megatrend [7] - DraftKings' revenue grew 39% year over year to nearly $1.1 billion in Q3, with expectations of a 31% increase in 2025 [8] - The stock is currently trading at just over 4 times trailing-12-month revenue, offering better value compared to more than 5.6 times sales last year [8] - Management anticipates free cash flow to reach approximately $850 million in 2025, indicating potential for higher long-term margins [9] - Sports betting is legal in 38 states, with Texas and California yet to legalize it, presenting future growth opportunities for DraftKings [10]

Group 1: Market Overview - The S&P 500 index ended 2024 up 23%, following a 24% increase in 2023, indicating a strong market performance despite concerns about stock valuations [1][2] - Many stocks have seen price increases outpacing improvements in their underlying fundamentals, leading to perceptions of an expensive market [1][2] Group 2: Uber - Uber holds a dominant market position with over 161 million users, leveraging its network for growth in ride-sharing, delivery, and freight services [3][4] - In Q3, Uber's gross bookings increased by 17% for ride-sharing and 16% for delivery, with improved profitability in the ride-sharing segment [4] - Uber's stock is priced at around $65, with an enterprise value-to-sales ratio of 3.4 and a forward price-to-earnings multiple of 28, while analysts expect sales growth of 16% and earnings growth of 23% in the coming year [7] Group 3: Etsy - Etsy is undergoing a transition to improve long-term growth in gross merchandise sales, focusing on customer experience rather than immediate sales [8][9] - The company experienced a 4.1% drop in gross merchandise sales but offset this with a higher take rate and increased advertising service sales [10] - Etsy's stock trades at 20 times analysts' expectations for 2025 earnings, presenting a good value despite being a more cyclical stock [12] Group 4: DraftKings - DraftKings is a leading online sports betting and iGaming company, positioned to benefit from the rapid growth of online gambling in North America [13][16] - The company reported a 41% year-over-year increase in users, with management expecting revenue growth of 27% to 35% in 2025 and an EBITDA margin improvement to about 7.4% [16] - DraftKings stock is priced at $38, with an enterprise value approximately 20 times the forecasted 2025 EBITDA, indicating strong potential for earnings growth [17]