DraftKings Earnings: Robust Sales and Profit Outlook Dealt as Platform Wins With Customers

We plan to lift our $26.50 fair value estimate for no-moat DraftKings to $32, following strong third-quarter results and updated guidance. The company’s technology and product offering are resonating strongly with customers. In fact, revenue grew 57% driven by robust customer retention and acquisition (monthly unique player growth of 40%, with revenue per user up 14%) and mix toward higher hold parlay bets (hold in the quarter was 9.0% versus 7.7% in the full-year 2022). Overall, gross gaming revenue share of sports and iGaming where the company is competing was 33% versus 30% last quarter and 25% last year.