Why DraftKings (DKNG) Is Rallying Today

DraftKings (DKNG) is surging 14% after the online betting company delivered much higher-than-expected fourth-quarter earnings per share and increased its 2025 revenue guidance.

A Look at DKNG’s Q4 Results and Its 2025 Guidance

The company reported Q4 EPS, excluding certain items, of 14 cents, way above analysts’ average estimate of 4 cents. On the top line, its revenue increased 13% versus the same period a year earlier to $1.39 billion, which was in line with analysts’ mean outlook.

A woman at a betting table paying out customers who won their sports bets.

The number of DraftKings’ monthly unique paying customers surged 36% year-over-year to 4.8 million.

DKNG increased its full-year sales guidance to $6.3 billion to $6.6 billion, up from its previous outlook of $6.2 billion to $6.6 billion. The midpoint of the new range, $6.45 billion, was 1.1% above analysts’ average estimate. DKNG reiterated its 2025 adjusted EBITDA guidance of $900 million to $1 billion.

DKNG’s Key Comments

CEO Jason Robins said the company would seek to “enhance (its) customer economics through new initiatives such as extending our lead in live betting and advancing cross sell efforts to and from new verticals.”

He added that, “We believe we are well-positioned to capture significant (market) share, and we haven’t even begun to expand outside the U.S. and Canada, which we could explore as a longer-term opportunity.”

While we acknowledge the potential of DKNG, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DKNG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.