Flutter Entertainment issued an unscheduled January 7 update to its 2024 financial results, with adverse news for investors. It predicted a 7 percent cut in its cash flow for the entire 2024 fiscal year, driven by rampant sports bettors’ wins in the United States. Flutter is the corporate parent of FanDuel.
According to Jefferies Equity Research analyst James Wheatcroft in a January 8 investor note, Flutter suffered from “the highest rate of NFL favorites winning in nearly 20 years.” This prevalence continued a November trend of weak margins for sportsbook operators.
Wheatcroft pegged the FanDuel cash-flow sack at $260 million. He added that it was mitigated to $170 million at the group level, in part through reductions in marketing and also via favorable sports-betting results in the United Kingdom.
Dismissing the news as “transitory,” Wheatcroft noted that Flutter’s earnings guidance remained the same, despite “significant adverse results” on the gridiron on December 30. “Any share price weakness following a short-term margin dip in this structurally improving margin environment would be a buying opportunity, in our view,” he wrote.
