Spotting Winners: DraftKings (NASDAQ:DKNG) And Gaming Solutions Stocks In Q2
Let’s dig into the relative performance of DraftKings (NASDAQ:DKNG) and its peers as we unravel the now-completed Q2 gaming solutions earnings season.
Gaming solution companies operate in a dynamic and evolving market, and the digital transformation of the gaming industry presents significant opportunities for innovation and growth, whether it be immersive slot machine terminals or mobile sports betting. However, the gaming solution industry is not without its challenges. Regulatory compliance is a crucial consideration as companies must navigate a complex and often fragmented regulatory landscape across different jurisdictions. Changes in regulations can impact product offerings, operational practices, and market access, requiring companies to maintain flexibility and adaptability in their business strategies. Additionally, the competitive nature of the industry necessitates continuous investment in research and development to stay ahead of competitors and meet evolving consumer demands.
The 7 gaming solutions stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 2.4%.
Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. This year has been a different story as mixed inflation signals have led to market volatility. However, gaming solutions stocks have held steady amidst all this with share prices up 3.1% on average since the latest earnings results.
DraftKings (NASDAQ:DKNG)
Getting its start in daily fantasy sports, DraftKings (NASDAQ:DKNG) is a digital sports entertainment and gaming company.
DraftKings reported revenues of $1.10 billion, up 26.2% year on year. This print was in line with analysts’ expectations, and overall, it was a very strong quarter for the company with an impressive beat of analysts’ operating margin estimates and full-year revenue guidance exceeding analysts’ expectations.
“We very efficiently acquired many more new customers than we expected and saw continued healthy existing customer engagement in the second quarter.” said Jason Robins, DraftKings’ Chief Executive Officer and Co-founder.
Interestingly, the stock is up 7.7% since reporting and currently trades at $38.25.
Is now the time to buy DraftKings? Access our full analysis of the earnings results here, it’s free.
Best Q2: Rush Street Interactive (NYSE:RSI)
Specializing in online casino gaming and sports betting, Rush Street Interactive (NYSE:RSI) is an operator of digital gaming platforms.
Rush Street Interactive reported revenues of $220.4 million, up 33.5% year on year, outperforming analysts’ expectations by 9.4%. The business had an incredible quarter with an impressive beat of analysts’ earnings estimates.
Rush Street Interactive delivered the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.2% since reporting. It currently trades at $9.87.
Is now the time to buy Rush Street Interactive? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: PlayStudios (NASDAQ:MYPS)
Founded by a team of former gaming industry executives, PlayStudios (NASDAQ:MYPS) offers free-to-play digital casino games.
PlayStudios reported revenues of $72.59 million, down 6.7% year on year, falling short of analysts’ expectations by 2.6%. It was a softer quarter as it posted full-year revenue guidance missing analysts’ expectations and a miss of analysts’ daily active users estimates.
PlayStudios delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. The company reported 13.6 million monthly active users, down 2% year on year. As expected, the stock is down 17.9% since the results and currently trades at $1.60.
Read our full analysis of PlayStudios’s results here.
Light & Wonder (NASDAQ:LNW)
With names as crazy as Ultimate Fire Link Power 4 for its products, Light & Wonder (NASDAQ:LNW) is a gaming company supplying the casino industry with slot machines, table games, and digital games.
Light & Wonder reported revenues of $818 million, up 11.9% year on year. This result surpassed analysts’ expectations by 2.6%. More broadly, it was a mixed quarter as it recorded a miss of analysts’ earnings estimates.
The stock is up 5.2% since reporting and currently trades at $105.79.
Read our full, actionable report on Light & Wonder here, it’s free.
Accel Entertainment (NYSE:ACEL)
Established in Illinois, Accel Entertainment (NYSE:ACEL) is a provider of electronic gaming machines and interactive amusement terminals to bars and entertainment venues.
Accel Entertainment reported revenues of $309.4 million, up 5.7% year on year. This print beat analysts’ expectations by 2.7%. Zooming out, it was a very strong quarter as it also recorded a solid beat of analysts’ earnings estimates.
The stock is up 6% since reporting and currently trades at $11.74.
Read our full, actionable report on Accel Entertainment here, it’s free.
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