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Shares of DraftKings Inc DKNG started Thursday trading on a positive note, even after a steep rise through the week, before pulling back.
Investor confidence in the company’s profitability narrative is likely to be hit by EBITDA losses exceeding consensus estimates in the first half of 2023, according to Roth Capital Partners.
The DraftKings Analyst: Edward Engel downgraded DraftKings from Neutral to Sell with a $15 price target.
The DraftKings Thesis: DraftKings is likely to guide to disappointing EBITDA for the first quarter of 2023 during the fourth-quarter earnings call, Engel said in the downgrade note.
The company’s “new state launches require more up-front investment than Street forecasts imply,” the analyst said.
Check out other analyst stock ratings.
“We expect Fanatics to launch OSB by 1Q23 and reinvigorate concerns over an intensifying promotional environment,” he said. “Meanwhile, DKNG has rallied 54% YTD as bulls front-run positive EBITDA in 4Q23,” he added.
DKNG Price Action: Shares of DraftKings were down 2.24% at $17.28 Thursday morning.
Photo via Shutterstock.
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Image and article originally from www.benzinga.com. Read the original article here.