Group 1: Core Insights - The article highlights three key stocks in the online gaming sector that are considered strong buying opportunities for 2026: DraftKings, Flutter Entertainment, and Rush Street Interactive [1] - DraftKings reported a 43% year-over-year revenue increase to $2 billion, with adjusted EBITDA soaring 283% to $343 million, indicating strong growth potential in the online gaming market [1] - Flutter Entertainment, parent company of FanDuel, holds over 40% market share in U.S. sports betting, generating approximately $12.5 billion in annual revenue, with a 45% increase in EBITDA and margins reaching 21% [1] Group 2: Company-Specific Highlights - DraftKings is recognized as a leader in the online gambling space, with expectations for continued growth driven by state expansions and synergies in iGaming/iLottery [1] - Flutter Entertainment is positioned as a strong growth bet, trading at 4.5 times sales and 18 times forward EBITDA, which is below its historical average, making it an attractive value proposition [1] - Rush Street Interactive demonstrated a 38% revenue growth year-over-year, with a valuation of just 2.5 times sales, and recently achieved GAAP profitability with an EPS of $0.15, indicating significant upside potential [1]

Group 1 - Genuine Parts Company (NYSE:GPC) fell 19.51% after reporting worse-than-expected fourth-quarter financial results and issuing FY26 EPS guidance below estimates, leading to multiple analysts lowering their price forecasts [1] - Flutter Entertainment plc (NYSE:FLUT) decreased 11.86% ahead of its fourth quarter and full year 2025 financial results scheduled for release on February 26 [2] - Okta, Inc. (NASDAQ:OKTA) fell 12.86% as multiple firms lowered their respective price targets on the stock [2] Group 2 - BorgWarner Inc. (NYSE:BWA) slumped 10.59% following a downgrade from UBS analyst Joseph Spak from Neutral to Sell, with the price target raised from $49 to $55 [3] - Expedia Group, Inc. (NASDAQ:EXPE) fell 4.32%, with Wedbush analyst Scott Devitt reiterating a Neutral rating and maintaining a $260 price forecast [3] - BridgeBio Pharma, Inc. (NASDAQ:BBIO) slumped 11.43% this week [3]

Group 1: Key Findings from the Working Paper - Kalshi's predictions on headline CPI show a statistically significant improvement over the Bloomberg consensus forecast [2] - For core CPI and unemployment, Kalshi's performance is comparable to professional forecasters from the New York Fed, with the advantage of continuous updates [2] - Kalshi achieved a perfect track record for rate predictions on the day before each FOMC meeting since 2022, indicating a significant improvement over fed funds futures [3] Group 2: Implications for the Federal Reserve and Market Participants - The authors suggest that the Federal Reserve should utilize Kalshi data, as current benchmarks are considered "too far removed" from real-time market conditions [4] - If prediction markets gain traction among traders and policymakers, platforms like Kalshi could experience substantial growth, potentially impacting traditional financial institutions [4] Group 3: Affected Companies - Robinhood Markets (NASDAQ:HOOD) is positioned to benefit directly, as Kalshi's contracts are integrated into its app, which has over 27 million funded accounts [5] - Coinbase Global (NASDAQ:COIN) is also focusing on prediction markets as a key component of its strategy, with Kalshi-powered contracts being rolled out nationwide [5] - Flutter Entertainment (NYSE:FLUT), the parent company of FanDuel, has seen a decline of over 44% in value this year due to competition from Kalshi affecting its sports betting revenue [6] - DraftKings and FanDuel have launched their own prediction market apps but have not matched Kalshi's growth, leading to downgrades from Bank of America for both companies [6]

Core Viewpoint - Flutter Entertainment will release its fourth quarter and full year 2025 financial results on February 26, 2026, after market close [1] - A conference call will be held on the same day to discuss the results and answer questions from analysts and investors [2] Financial Results Announcement - The financial results will be available on Flutter's website in the "Investors" section [1] - The results will be released at 4:05 p.m. EST (9:05 p.m. GMT) [1] Conference Call Details - The conference call is scheduled for February 26 at 4:30 p.m. EST (9:30 p.m. GMT) [2] - Access to the call will be available via webcast and telephone, with a replay available one hour after the call [2] Participation Information - Analysts and investors can join the live conference call by dialing specific numbers and using conference ID 12768 [3] - Dial-in numbers include +1 800 715 9871 for North America and +44 800 358 0970 for the United Kingdom, among others [3] Company Overview - Flutter is a leading online sports betting and iGaming operator with a strong market position in the US and globally [4] - The company aims to leverage its size and innovative mindset to drive long-term growth and promote sustainability through its Positive Impact Plan [4] Brand Portfolio - Flutter operates a diverse range of online sports betting and iGaming brands, including FanDuel, Sky Betting & Gaming, and PokerStars [4]

Group 1 - Astera Labs, Inc. (NASDAQ:ALAB) decreased by 23.74% after reporting fourth-quarter financial results [1] - Medpace Holdings, Inc. (NASDAQ:MEDP) slumped 20.69% following its fourth-quarter financial results and multiple analyst price target reductions [2] - Zillow Group, Inc. (NASDAQ:Z) decreased by 20.89% after reporting mixed fourth-quarter financial results [2] - Karman Holdings Inc. (NYSE:KRMN) fell 20.96% this week [2] Group 2 - AST SpaceMobile, Inc. (NASDAQ:ASTS) decreased by 17.9% after announcing a $1 billion convertible senior notes offering [3] - Ryan Specialty Holdings, Inc. (NYSE:RYAN) slumped 17.90% after reporting worse-than-expected fourth-quarter financial results and announcing a $300 million buyback [3] - Flutter Entertainment (NYSE:FLUT) fell 18.88% amid sympathy with DraftKings after its fourth-quarter financial results [3] Group 3 - CBRE Group (NYSE:CBRE) decreased by 15.55% despite reporting better-than-expected fourth-quarter adjusted EPS results and issuing FY26 adjusted EPS guidance above estimates [4]

Core Viewpoint - Flutter Entertainment is currently viewed as a stock with significant upside potential, despite recent price target reductions by analysts due to a slowdown in US online sports betting growth [1][2]. Group 1: Analyst Ratings and Price Targets - UBS has lowered its price target for Flutter Entertainment from $320 to $300 while maintaining a Buy rating, citing pressure on the company's equity story due to a slowdown in US online sports betting [1]. - Bernstein analyst Ian Moore has also reduced the price target for Flutter from $225 to $170, keeping a Market Perform rating ahead of the company's quarterly results [3]. Group 2: Financial Forecasts and Market Position - The recent trends have led UBS to adjust its forecasts for Flutter's performance in 2026 and 2027 to slightly below consensus expectations, indicating anticipated share volatility until US performance becomes clearer [2]. - Despite the challenges, Flutter maintains a leading global position in the sports betting and gaming industry, with strong long-term structural tailwinds [2].

Market Overview - The U.S. market closed with mixed results, as the Russell 2000 gained 1% driven by hopes of a rate cut, while large-cap indexes like the Dow and S&P 500 showed minimal changes, and the Nasdaq declined by 0.22% [2] - The Russell 2000 was noted to be leading the market with a 1.84% increase, while the S&P 500, Nasdaq, and Dow followed with gains of 0.62%, 0.55%, and 0.42% respectively [3][8] Winners - Evolution Metals & Technologies Corp saw a significant increase of 28%, leading the U.S. stocks, followed by Rivian Automotive at 27.1%, Tri Pointe Homes at 26.6%, and Magna International at 18.8% [4][5] - The market capitalization of Evolution Metals & Technologies Corp is reported at $5.79 billion, while Rivian Automotive has a market cap of $21.82 billion, and Tri Pointe Homes stands at $3.98 billion [5] Losers - Bright Horizons Family Solutions experienced the largest decline at 21.3%, with other notable decliners including Pinterest at 17.6%, Fortune Brands at 15.1%, and Callaway Golf also at 15.1% [6] - Prediction markets such as DraftKings and Flutter Entertainment saw declines of 13% and 11.6% respectively [6]

Core Insights - Prediction markets experienced significant growth in 2025, with trading volumes reaching $63.5 billion, a fourfold increase from $15.8 billion in 2024, driven by platforms like Polymarket and Kalshi [1] - DraftKings' stock has declined over the past year, losing more than half its value, which may be related to the rise of prediction markets [2] - DraftKings reported record Q4 2025 revenue of $1.989 billion, a 43% increase from $1.393 billion in the previous year, although it slightly missed the consensus estimate of $1.990 billion [3][5] Financial Performance - The number of monthly unique payers remained stable at 4.8 million, with average revenue per payer increasing by 43% to $139 [4] - Adjusted EBITDA reached $343 million, four times the prior-year level, with margins expanding over 1,000 basis points to 17% [5] - Net income turned positive at $136.4 million, reversing a loss of $134.9 million, with diluted EPS at $0.25 and adjusted earnings at $0.36 per share, below the $0.50 estimate but up from $0.14 a year ago [5] Future Guidance - DraftKings' guidance for 2026 anticipates revenue between $6.5 billion and $6.9 billion, alongside adjusted EBITDA ranging from $700 million to $900 million, indicating a potential deceleration in growth [7] - The guidance excludes revenue contributions from DraftKings Predictions, suggesting a conservative management approach as the company ramps up this new segment [8] Market Dynamics - Management indicated that rival prediction markets had only a slight impact on January sportsbook handle, primarily affecting low-margin customers [9] - The broader prediction market category could expand to $10 billion, presenting DraftKings with an opportunity to capture market share through its established infrastructure [10] - Sports betting remains DraftKings' core business, with total potential payouts across open wagers in 2025 estimated at $2.5 trillion [11] Strategic Initiatives - Customer acquisition and retention have improved, with plans to invest in Predictions to attract more users, leveraging data analytics and personalization tools [13] - DraftKings' management views heavy investment in Predictions as essential to mitigate risks associated with inaction, aligning closely with the company's betting expertise [15] - The robust performance in 2025 and ambitious growth strategies position DraftKings as a compelling buy opportunity, especially for investors interested in the convergence of betting and predictive trading [16]

Core Viewpoint - Flutter Entertainment plc (NYSE:FLUT) is identified as one of the best beaten down growth stocks to buy now, despite a recent target price cut by Canaccord [1]. Group 1: Company Overview - Flutter Entertainment plc is an online betting and gaming company primarily operating in the United States, the UK, Ireland, and Australia, founded in 1988 and based in New York [4]. Group 2: Market Sentiment and Performance - Canaccord reduced its target price on Flutter Entertainment by 10% to $270 from $300 but maintained a Buy rating, citing that the market's negative sentiment towards digital gambling stocks was an overreaction [1]. - The decline in total handle (total bets) in December, which was $747 million, represented a 9.3% decrease from the previous year, while revenue increased by 351.6% to $68 million due to an improved hold rate [2]. - US-wide figures showed a total handle of $13.5 billion in December, a 14.4% decline from the previous year, yet revenue rose by 78.4% to $1.7 billion, with the hold rate improving to 12.3% [3].

Core Viewpoint - Cathie Wood's ETFs sold 785,490 shares of DraftKings amid concerns over increased competition from prediction markets, although these fears may be exaggerated, suggesting there are better investment opportunities in the online betting sector than DraftKings at this time [1]. Company Overview - DraftKings, based in Boston, operates retail sports betting in 28 states and has a prediction markets app available in 38 states, also allowing online bets on casino games [2]. Financial Performance - DraftKings has a market capitalization of $13.5 billion and a forward price-to-earnings (P/E) ratio of 22x. In Q3, the company's revenue increased by 4% year-over-year to $1.14 billion, with an operational loss of $272 million, an improvement from a $298.6 million loss in Q3 of 2024. The company forecasts its 2025 EBITDA, excluding certain items, to be between $450 million and $550 million [3]. Market Trends - As of February 9, DraftKings' stock had decreased by 21% in 2026, while the S&P 500 Index rose by 1.75% during the same period [4]. - The popularity of prediction markets for sports betting has surged, particularly since Kalshi began allowing users to bet on sporting events, following a lack of federal opposition during the Trump administration [5]. - The decline in shares of sportsbook operators like DraftKings and Flutter indicates expectations of a shrinking market share for sportsbooks. Analysts have also reduced Flutter's Q4 adjusted earnings per share (EPS) estimates by 49% in the last three months [6]. Betting Activity - Total wagers on the Seahawks during this year's Super Bowl reached $1.5 billion, indicating substantial financial activity within major online sports-betting platforms [7].