DraftKings Stock Ready For Another Post-Earnings Pop

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 earnings six times, with an average return of 8.6% over those last two years. This time around, options traders are anticipating a larger-than-usual, 12.9% shift, regardless of direction.

Per the American Gaming Association, for the third quarter, Americans legally wagered $30.3 billion on sports and generated $3.24 billion in quarterly revenue, up 42.4%. Despite a 20.8% year-to-date gain, DraftKings stock has pivoted around $42, per the chart below, in the last 12 months. However, the shares are now eyeing their highest close since early December. 

Sports betting volume is cyclical around various seasons and always picks up around the Super Bowl. But even when the big game is over, quarterly revenue could be in a good spot until the summer. Basketball, golf, soccer, and baseball are all in the midst of their seasons and won’t wind down until June. March Madness, NBA playoffs, and the start of baseball are all flashpoints for bettors that could keep the tailwinds blowing for DKNG into the summer months.