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DKNG is literally the King after exceeding analysts revenue expectation for Q1

DraftKings is a company that focuses on gambling and online gambling that is currently gaining approval in different states, marking the expansion of the company’s market. They trade in Wall Street with a market DKNG, and as the market increases, so will the revenue of the company. So why did the stocks suddenly take a dip last May?

Although the company posted overwhelming results for their Q1 earnings, the company still took a dip after analysts lowered the price target for DKNG stocks, which affected the stocks’ momentum and started drifting lower for a couple of days.

However, this is not something that investors should worry about, as shown on the company’s Q1 earnings report, the revenue alone rose by 253% compared to Q1 2020. There’s also an increase of 48% for the average revenue for each customer, reflecting that the customers are now more into the app, or into the betting game. There is also the outlook of further expanding the reach of its activity as they expect more states to agree and legalize online gambling, bringing in more customers resulting to more revenue.

This is very easy to see when we focus on the expectations versus the Q1 earnings result that the company has released. Analysts have expected a revenue of more or less $231.5 million from the company for Q1 of 2021, but they basically zoomed past that and produced $312 million instead. That itself shows how promising the stocks of DKNG are as continuous expansion is to be expected while the platform is getting more exposed to customers. Hence, adjustments were made to their existing guidance for revenue for the rest of the year. Instead of the previous $950 million at midpoint or Q2, they raised the bar and move the guidance to $1.1 billion.

This performance while the company is only available in 12 states, where in Michigan and Virginia were just recently added to the list. The legalization of online sports betting is being seen as an option to generate tax revenue and to lower illegal sports betting, which will be further beneficial to the state. This is the reason why the company is very positive that more states will be following the legalization of the platform, hence, the growth of the stocks in the future.

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