- DraftKings (DKNG) the stock has fallen sharply in 2022 so far
- An earnings event is coming, and there are positive events for potential investors to take note of.
- Investors should consider buying DraftKings stock ahead of the earnings data release, and perhaps other stocks after that.
Digital sports games and entertainment company DraftKings (NASDAQ:DKNG) plans to announce its first-quarter 2022 financial results on May 6. DKNG stock is worth owning before and/or after the earnings release.
Since quarterly earnings releases can be unpredictable, cautious traders can wait until after May 6 to open a position in DraftKings stock. However, if you’re like a sports bettor and don’t mind gambling a bit, feel free to buy a few stocks up front.
As we will find out, the sentiment is currently quite negative when it comes to DKNG stocks. This could create a contrarian opportunity for bottom fishers, as low expectations can lead to positive earnings surprises.
Additionally, DraftKings has some news to report, which should get shareholders excited about the company’s future prospects. Maybe the exchange is just one big casino, but the odds look pretty good for DraftKings in 2022.
What’s going on with DKNG Stock?
In early September last year, DKNG stock looked like a darling on Wall Street. The stock price hit a 52-week high of $64.58 before embarking on a long slide.
Just recently the stock fell to $15 and changed. It’s either a toxic asset or a bargain, depending on one’s perspective.
Of course, the next earnings release could induce a much-needed rally. Even modest beats at the bottom and top of the line could send DKNG stock much higher.
What we have to keep in mind is that DraftKings is a work in progress. Several months ago, the company acknowledged that it “expects its adjusted EBITDA loss in 2022 to be between $825 million and $925 million.”
If all goes according to plan, DraftKings should be able to remedy this situation by the end of this year. Thus, “assuming that we had not launched additional statements after December 31, 2021, we expect that we would have generated positive Adjusted EBITDA in the fourth quarter of 2022”.
So be patient with DraftKings. This is not a casino game where you can just cash in your chips today or tomorrow.
Expansion in Puerto Rico
Meanwhile, skeptics can’t say that DraftKings isn’t moving forward as a company. Indeed, the company broadens its geographical horizons.
To that end, DraftKings has just signed an agreement with the Mashantucket Pequot Tribal Nation. Together, they plan to offer “the DraftKings online and retail sports betting experience in Puerto Rico, subject to obtaining applicable licenses and regulatory approvals.”
There, players can expect to see DraftKings retail sports betting at Foxwoods El San Juan Casino. This should be available “in the coming weeks, pending receipt of applicable licenses and regulatory approvals.”
It will be quite an experience, to put it mildly. According to the press release, space inside Foxwoods El San Juan Casino will include six betting kiosks, two over-the-counter ticket booths, a “massive” video wall, and bar and food services.
Matt Kalish, President of DraftKings North America and Co-Founder, celebrated the occasion saying, “Puerto Rico is known for its rich and vibrant sports culture, and we look forward to being able to provide fans with a safe and legal form of sport. . wagering via our retail and online sportsbooks.
What you can do now
Clearly, DraftKings is making progress in bringing its sports betting experience to new regions. Hopefully the company will achieve its positive adjusted EBITDA target in the fourth quarter of 2022.
Until then, investors can buy DKNG shares either before the impending earnings event or after. Heck, you can even buy before and afterwards, if you’re in the mood to play.
As of the date of publication, David Moadel had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.