UBS Initiates Flutter Entertainment at Buy Rating, $306 Price Target

Top Wall Street analysts changed their outlook on these top names. For a complete view of all analyst rating changes, including upgrades and downgrades, please see our analyst ratings page.

• Guggenheim analyst Seamus Fernandez initiated coverage on Cidara Therapeutics, Inc. with a Buy rating and announced a price target of $33. Cidara Therapeutics shares closed at $13.11 on Thursday. See how other analysts view this stock.
• RBC Capital analyst Leonid Timashev initiated coverage on Cytokinetics, Incorporated with an Outperform rating and announced a price target of $80. Cytokinetics shares closed at $55.84 on Thursday. See how other analysts view this stock.
• Stephens & Co. analyst Sudan Loganathan initiated coverage on Immunome, Inc. with an Overweight rating and announced a price target of $30. Immunome shares closed at $12.54 on Thursday. See how other analysts view this stock.
• Jefferies analyst Dennis Ding initiated coverage on Inhibikase Therapeutics, Inc. with a Buy rating and announced a price target of $8. Inhibikase Therapeutics shares closed at $2.78 on Thursday. See how other analysts view this stock.
• UBS analyst Ben Shelley initiated coverage on Flutter Entertainment plc with a Buy rating and announced a price target of $306. Flutter Entertainment shares closed at $237.98 on Thursday. See how other analysts view this stock.

Considering buying CYTK stock? Here’s what analysts think:

American Public Education, Inc. APEI is slated to report third-quarter 2024 results on Nov. 12, after market close.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

In the last reported quarter, the company’s earnings per share (EPS) met the Zacks Consensus Estimate, but revenues missed the same by 0.8%. On a year-over-year basis, revenues grew 3.9% and EPS rose 104%.

The company’s earnings topped the consensus mark in three of the trailing four quarters and met on one occasion, an average surprise being 133.4%.

Trend in Estimate Revision

The Zacks Consensus Estimate for the third-quarter EPS has remained stable at 1 cent per share in the past 60 days. The estimated figure indicates a 50% decrease from the year-ago quarter’s EPS of 2 cents.

American Public Education, Inc. Price and EPS Surprise

American Public Education, Inc. price-eps-surprise | American Public Education, Inc. Quote

The consensus mark for revenues is pegged at $153.62 million, suggesting a 1.8% year-over-year rise.

Factors to NoteEnrollments & Revenues

American Public’s third-quarter revenues are likely to have increased slightly from the previous year due to robust performance across all its segments. The company has been witnessing strong enrollment at American Public University System segment or APUS (which accounted for 50.4% of second-quarter revenues) and Hondros College of Nursing segment or HCN (which accounted for 10.7% of second-quarter revenues), along with improvement at Rasmussen University or RU (which accounted for 34.7% of second-quarter revenues). Also, select tuition and fee increases, combined with the positive impact of cost reductions and realignments, added to growth.

APEI expects total revenues to increase 1-3% year over year to $152-$155 million.

APUS’ total net course registrations are likely to be 90,500-92,300, reflecting a flat to 2% decline year over year. HCN’s total enrollment is expected to increase 10% from the prior year’s figure to 3,100 students. RU’s student enrollment is expected to be up 0.1% from the year-ago quarter’s figure of 13,500. Within RU, On-ground student enrollment is likely to decline 6% to 6,030, while Online student enrollment is expected to rise 4% to 7,440 year over year.

For the third quarter, we expect revenues in the APUS and HCN segments to increase 1.3% to $77.4 million and 11.6% to $15.3 million, respectively, year over year. Our model predicts the RU segment’s revenues will decline marginally to $52 million year over year.

Margins

The company is expected to witness lower earnings, mainly due to lower contributions from the GSUSA segment, which is still generating negative adjusted EBITDA. Also, tepidness in On-ground enrollment at the RU segment is an added headwind. This apart, the company’s second and third quarters of every year tend to be seasonally low and generate low EBITDA.

The company anticipates adjusted EPS between a loss of 6 cents and earnings of 5 cents versus a loss of 25 cents per share reported a year ago. Adjusted EBITDA is expected to be within $9-$12 million, a decline of 34-56% year over year.

For the to-be-reported quarter, we expect adjusted EBITDA to decline 40.7% to $10.7 million and adjusted EBITDA margins to decline to 7% from 12% reported a year ago. We project adjusted EPS to be at break-even.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict an earnings beat for American Public this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here, as you will see below.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: American Public currently carries a Zacks Rank #3.

Stocks With the Favorable Combination

Here are some other companies, which according to our model, have the right combination of elements to post an earnings beat this season:

Lululemon Athletica Inc. LULU currently has an Earnings ESP of +15.20% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for LULU’s EPS is pegged at $2.73, implying a 7.9% increase from the year-earlier quarter. LULU has a trailing four-quarter earnings surprise of 7.9%, on average.

The Walt Disney Company DIS presently has an Earnings ESP of +2.09% and a Zacks Rank of 3.

The consensus estimate for DIS’ EPS is pegged at $1.09, implying 32.9% growth from the year-ago quarter’s actual. DIS has a trailing four-quarter earnings surprise of 18%, on average.

Flutter Entertainment plc FLUT has an Earnings ESP of +172.73% and a Zacks Rank #3 at present.

The consensus estimate for FLUT’s EPS is pegged at 17 cents, moved up from 9 cents in the past seven days. It has surprised last-quarter EPS by 80%.

Zacks Investment Research

Sports betting and online gaming company DraftKings Inc could highlight early results from the 2024 NFL season and new state legalizations when the company reports third-quarter financial results Thursday after market close.

Earnings Estimates: Analysts expect the company to report third-quarter revenue of $1.11 billion, up from last year's third-quarter total of $789.96 million according to data from Benzinga Pro.

The company missed analyst estimates for revenue for the second quarter and two of the past three quarters, but has beaten analyst estimates for revenue in eight of the last 10 quarters overall.

Analysts expect DraftKings to report a loss of 42 cents per share in the third quarter, compared to a loss of 35 cents per share in last year's third quarter. The company has beaten analyst estimates for earnings per share in 10 straight quarters.

Read Also: DraftKings Offers $10K In Prizes For 2024 Election Predictions: Harris, Trump Swing State Performance Among Key Questions

What Analysts Are Saying: Strong market share in the sports betting space and the potential to surprise with updated financial guidance has Bank of America analyst Shaun C. Kelley bullish on DraftKings ahead of the earnings report.

The analyst, who has a Buy rating and $50 price target, recently said revenue flowthrough for the second half of the fiscal year could be better than expected and "protect" EBITDA for fiscal 2024.

"We expect top-line growth in the fourth quarter to come in slightly below guidance driven by unfavorable hold and challenging iGaming comps," Kelley said.

The analyst said DraftKings could also show its hold expansion similar to peer FanDuel with lower promotional spending activity.

Concerns for DraftKings in the third quarter include slower app downloads and unfavorable NFL game outcomes, Kelley added.

A near duopoly of the online sports betting space for DraftKings and FanDuel owner Flutter Entertainment was highlighted by Needham analyst Bernie McTernan recently.

McTernan said the total addressable market size of the U.S. online sports betting market could "continue to surprise to the upside."

“Scale and commitment to product leadership from FanDuel and DKNG likely keeps the OSB market dominated by these two players," McTernan said.

A Needham survey revealed that sports bettors primarily use FanDuel and DraftKings.

“We think share can continue to ebb and flow between FanDuel and DKNG as we do not see a physical network effect in OSB meaning there is not a structural reason for dominant market share leader like digital marketplaces.”

McTernan said unless the market structure in the U.S. changes, it’s “FanDuel and DKNG at the top and then everyone else.”

FanDuel (37.8%) and DraftKings (34.8%) had a combined 73% market share in 2023. BetMGM ranks a distant third at 8.6% market share.

In the second quarter of 2024, FanDuel had a market share of 37.3% with DraftKings at 37.0%. Both BetMGM and fourth-place Caesars had lower market share in the first two quarters of 2024 compared to 2023.

Key Items to Watch: DraftKings quarterly financial results come after the start of the 2024 NFL season, which is one of the most bet on sports in the U.S. and a key to revenue and earnings for the company in the fourth quarter.

Guidance from the company and early commentary on the NFL season will be closely watched by investors.

The company announced an inaugural $1 billion share buyback in the second quarter. Investors and analysts will be watching to see if any shares were bought during the third quarter.

DraftKings acquisition of Jackpocket led to lower average revenue per monthly unique paying customer in the second quarter and could be an area to watch for investors and analysts.

As of July 25, DraftKings is live with mobile sports betting in 25 states and Washington, D.C., representing 49% of the U.S. population.

The company is live with iGaming in five states.

On Tuesday, voters in Missouri approved sports betting, becoming the 39th state to legalize. There is no current timetable on when the state will be live, but DraftKings and FanDuel supported the ballot proposal.

Missouri is the 18th most populous state and fourth-largest state that has not yet legalized sports betting, according to a report from Sportico.

DraftKings previously said there were 10 jurisdictions representing 12% of the U.S. population that have introduced legislation or introduced a bill for a referendum to legalize mobile sports betting.

An update on the timetable in Missouri and where other states stand could come from the company on Thursday.

DKNG Price Action: DraftKings stock was up 4.94% to $38.25 on Wednesday at market close versus a 52-week trading range of $28.69 to $49.57. DraftKings stock is up 14% year-to-date in 2024.

Read Next:

• Goldman Sachs Highlights 20 Top Short-Squeeze Opportunities For Q3 Earnings Season

Photo: Shutterstock

Latest Ratings for DKNG

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View the Latest Analyst Ratings

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

DraftKings Inc. DKNG is scheduled to report third-quarter 2024 results on Nov. 7, after the closing bell. In the last reported quarter, the company registered an earnings surprise of 500%.

DKNG’s Estimates Trend Upward

The Zacks Consensus Estimate for third-quarter adjusted loss per share has narrowed to 42 cents from 43 cents in the past 30 days. In the prior-year quarter, the company had reported an adjusted loss per share of 61 cents. For revenues, the consensus mark is pegged at $1.12 billion, suggesting a 41.6% year-over-year gain.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for DraftKings this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: DraftKings has an Earnings ESP of +13.83%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

DraftKings Inc. Price and EPS Surprise

DraftKings Inc. price-eps-surprise | DraftKings Inc. Quote

What’s Shaping DKNG’s Q3 Results?

DraftKings’ third-quarter performance is likely to have been aided by increased new online sportsbook and iGaming customers. The company has expected the strong pace of customer acquisition to persist throughout the second half of the year and extend further. An increase in Monthly Unique Payers (MUPs) is likely to have boosted the company’s top line.

The integration of Jackpocket has contributed to customer acquisition and is expected to have driven additional revenues. The acquisition of Jackpocket, with its low customer acquisition costs, is helping DKNG reach a broader audience and expand cross-selling opportunities.

DraftKings is enhancing its product offerings to differentiate itself from competitors. The latest features, such as in-house player prop wagers across multiple sports and progressive parlays, have been attracting more users to its Sportsbook platform. DKNG is also likely to have benefited from decreased customer acquisition costs.

Although DraftKings experienced efficient customer acquisition, its marketing spending is likely to have grown due to ongoing investments in the Jackpocket brand. This increased spending is likely to have impacted adjusted EBITDA despite long-term acquisition benefits.

Increased sportsbook tax rates in Illinois, along with existing high-tax states like New York and Pennsylvania, are expected to have affected DraftKings’ bottom line.

Price Performance & Valuation

DKNG shares have gained 14% in the past three months, underperforming the Zacks Gaming industry but outperforming the S&P 500. In the same timeframe, other major industry players like Flutter Entertainment plc FLUT has risen 25.3%, Caesars Entertainment, Inc. CZR has rallied 14.7% and MGM Resorts International MGM has jumped 2.8%.

Price Performance

News Corporation NWSA is set to report first-quarter fiscal 2025 results on Nov. 7.

The Zacks Consensus Estimate for revenues is pegged at $2.56 billion, indicating an increase of 2.47% from the year-ago quarter’s levels.

The consensus mark for earnings has remained steady at 16 cents per share in the past 30 days.

The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 24.7%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Let’s see how things have shaped prior to this announcement.

News Corporation Price and EPS Surprise

News Corporation price-eps-surprise | News Corporation Quote

Factors to Consider for NWSA

NWSA’s innovation and development in e-books, integrated with AI and emotional intelligence, bodes well for investors in the first quarter of fiscal 2025. This focused approach to innovation is likely to have strengthened customer engagement and loyalty, potentially driving sustained growth in the coming quarter.

NWSA’s agreement with OpenAI to expand offerings in journalism and reduce less principled actors is expected to have increased consumer momentum in the first quarter of fiscal 2025.

News Corporation’s broadening REA suite of premium products to improve deliverables for clients is expected to have driven the top line in the first quarter of fiscal 2025. NWSA’s enhanced technology and portfolio for sell and buy agents in realtor.com is expected to have driven its performance.

NWSA is expected to have benefited from the transition of consumers from traditional broadcast to OTT consumption. Foxtel, Kayo and Binge are expected to have positively contributed to the topline in first quarter of fiscal 2025.

However, macroeconomic factors like high interest rates, high mortgage rates, lower transaction volumes, lofty prices and limited inventory are expected to have negatively impacted the top line in the first quarter of fiscal 2025.

NWSA’s dependence on advertising, negatively impacted by lower ad spending by businesses amid the conflict between Russia and Ukraine, is expected to have been reflected in the top line in the to-be-reported quarter. In the fourth quarter of fiscal 2024, revenues in the News Media segment fell 5% to $545 million, primarily due to lower advertising revenues. This trend is expected to have continued in the first quarter of fiscal 2025.

The balance between the company's growth initiatives and its ability to mitigate headwinds in challenging segments is likely to have been a key focus in assessing NWSA's overall performance and future prospects.

What Our Model Says for NWSA

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here, as you can see below.

News Corporation currently has an Earnings ESP of 0.00% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this season.

Flutter Entertainment PLC FLUT has an Earnings ESP of +172.73% and a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Flutter Entertainment’s shares have gained 19.1% year to date. FLUT is set to report its third-quarter 2024 results on Nov. 12.

DraftKings DKNG has an Earnings ESP of +13.83% and carries a Zacks Rank of 3 at present.

DraftKings’ shares have gained 1.5% year to date. DOCN is set to report its third-quarter 2024 results on Nov. 7.

Airbnb ABNB has an Earnings ESP of +0.12% and carries a Zacks Rank #3 at present.

ABNB’s shares have gained 1% year to date. ABNB is set to report third-quarter 2024 results on Nov. 7.

Zacks Investment Research