Online sports betting and gambling stocks have taken Wall Street by storm in recent months as the US economy reopened and live sports got back into action.
Not surprisingly, the Roundhill Sports Betting & iGaming ETF (NYSE :), which has hit new record highs in five of the last seven sessions, is up about 34% since its launch in early June, easily outperforming than the & # 39; s 8% profit in the same time frame.
Below, we highlight three stocks that are in an excellent position to further capitalize on the booming sports betting craze as more states across the country continue to legalize online and retail sports betting.
1. DraftKings
DraftKings (NASDAQ 🙂 has had a remarkable run so far this year as stay-at-home measures aimed at reducing the spread of the the coronavirus has fueled a boom in online sports betting and gambling. It recently announced a partnership with ESPN, and the stock stumbled upon Michael Jordan joining the board as a special advisor and taking an equity stake in the company.
Shares of the Boston, Massachusetts-based sports betting platform are up a whopping 430% since being made public through a special purpose acquisition company (SPAC) on April 24, compared to the S&P 500's 21% gain in same period.
The stock closed at $ 56.78 on Tuesday after hitting a record high of $ 64.19 at the start of the week. At its current level, the fast-growing sportsbook operator has a valuation of approximately $ 11.9 billion, making it the most valuable company in the sports betting industry.
DraftKings released a mixed set for the second quarter on August 14, as a majority of professional sports leagues remained on hiatus due to the ongoing COVID-19 pandemic.
It announced sales of $ 75 million, beating consensus estimates of $ 66.4 million. However, net losses for the quarter were worse than expected, with the company posting a loss of $ 0.55 per share for the three months ended July 31, compared to expectations for a loss per share of $ 0.20.
More importantly, DraftKings said it was debt-free with $ 1.2 billion in cash on its balance sheet. CEO Jason Robins said in the company's earnings report:
"The company is well positioned to continue to meet its key priorities, including entering new states as soon as possible, investing in products and technology to create new offerings for US sports, and acquiring and retaining customers"
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Draftkings then reports financial results on November 13 before markets open. The consensus calls for losses of $ 0.35 per share for the third quarter, while sales are expected to total $ 129.6 million.
2. Penn National Gaming
Penn National Gaming (NASDAQ 🙂 made headlines in January when it expanded into sports media and online betting by a stake of 36 % in Barstool Sports, the popular sports media company by high profile founder David Portnoy – for $ 163 million.
The Wyomissing, Pennsylvania-based company, which operates 41 casinos and racetracks in 19 states across the country, has seen its stock increase 166% since the start of the year, giving it a market capitalization of $ 10.4 billion.
Even more impressive, the shares – which ended last night at $ 67.94 – are up more than 1,700% from their low of $ 3.75 on March 18.
Penn National Gaming Daily
Penn easily exceeded profit and revenue expectations in the US, despite the staggered openings of several of its properties and the lack of live sports. Jay Snowden, President and CEO, said in the company's press release on August 6:
"While visit has yet to return to pre-COVID levels, largely due to state-imposed capacity constraints and limited facilities, expenditure per visit was remarkably high, resulting in better than expected revenues"
Penn is expected to report third quarter results on Thursday, Nov. 5 before opening. By consensus estimates, the casino and sports betting company should post a profit of $ 0.34 per share. Meanwhile, revenues are expected to grow 230% quarter-on-quarter to $ 1.08 billion, benefiting in part from pent-up demand and the return of many of the major sports leagues around the world.
In addition to earnings per share and revenue, investors will be happy to learn more about the success of the recently launched Barstool Sportsbook app, which went live in the state of Pennsylvania in mid-September. Barstool, which has 66 million monthly users, plans to launch its sports betting app in Illinois and Colorado.
3. Boyd Gaming
Boyd Gaming (NYSE 🙂 is a smaller sports betting company with a market capitalization of $ 3.4 billion. The Paradise, Nevada-based company, which operates 29 casinos in 10 states, has a 5% ownership stake in FanDuel, an online sports betting platform similar to DraftKings. Boyd also operates sportsbooks in many of its existing casinos.
Shares of the regional casino operator, which settled at $ 30.91 yesterday, have made an impressive rebound from the lows reached during the peak of the March coronavirus sell-off at an astonishing 380%.
Boyd blew past estimates when it reported the second quarter on July 28, boosting revenues from the casino operator who reopened nearly all of its locations since they closed in mid-May.
"Since reopening, we've got off to an excellent start," said Keith Smith, President and CEO in the company's earnings report.
"On a comparable basis at our reopened properties, we achieved company-wide growth and significant margin improvement while meeting state-regulated reductions in gaming capacity."
"While the total number of visits and revenues have decreased, spending per visit is robust",
Boyd then reports the profit after the closing clock on Tuesday, October 27. Consensus estimates call for earnings per share of $ 0.04 per share, compared to a loss of $ 0.98 in the last quarter. Sales are expected to increase 178% Q-o-Q to $ 585.2 million.
In addition to top and bottom line numbers, market players will also focus on Boyd & # 39; s update regarding the recent launch of its Stardust Social Casino mobile app, as well as expanding its strategic partnership with FanDuel in the state of Pennsylvania.
