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By Pat Evans
Last week, Goldman Sachs put a “buy rating” on Penn National Gaming, noting major upside to the company’s customer acquisition potential through its ownership of Barstool Sports. Penn National is slated to launch the Barstool Sportsbook app next month. Shares of Penn National have gained 101% in 2020.
Goldman’s rating came a few days before DraftKings released its second quarter earnings, which saw a 25% increase in revenue during the period. Despite the jump in revenue, the company lost $161.4 million in the second quarter, up from a $28.1 million loss in the same quarter last year.
The company does expect 22% to 37% revenue growth in the second half of 2020 — finishing the year with expected revenue between $500 million and $540 million. It also has $1.2 billion in cash and no debt to survive a fall if there is no college football.
DraftKings shares have dropped nearly 6% since the earnings report, but are still up 75% since going public in April. Also contributing to the dip was news from the IRS that companies like DraftKings and FanDuel have to pay excise tax on entry fees.
Notable earnings reports this week:
8/20: Alibaba
8/21: Foot Locker
