Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
DraftKings lowers guidance
Barry Jonas of Truist Securities on November 7 commented on DraftKings’ recent investors call.
“DraftKings lowered 2025 guidance last night as the hold pendulum keeps on swinging (but maybe more so down during NFL), while there’s incremental spend on DraftKings Predictions,” Jonas wrote. “With the market viewing prediction as a potential threat we understand DraftKings’ move, though there’s still uncertainty how state regulators will respond. We’ll assume for now that DraftKings isn’t gambling badly here and focus on our positive outlook for the brand/tech. Reflecting the guidedown and further conservatism, we take 2025E EBITDA down -26% to $500 million, and 2026E by -11% to $1.2 billion. Price target to $45 (from $50). Maintain Buy.”
Golden Entertainment sale
David Bain of Texas Securities Capital on November 6 looked at the sale of Golden Entertainment.
“This morning, Golden Entertainment announced it entered into a definitive agreement to sell its operating assets to Blake Sartini, Founder, Chairman and CEO of Golden Entertainment, and seven of its real estate assets to gaming REIT VICI (no rating),” Bain wrote. “Total consideration amounts to $30 per share, a 41% premium to yesterday’s closing price, and ~35% higher than its average trading price since September 25. While we believe the asset value and operations are worth more than $30 per share, we also believe there are only a few potential alternative buyers that would have interest near/above Sartini/VICI consideration and the stock price premium screens fair. As such, we reduce our price target to $30 and our stock rating to Hold.”
Penn and ESPN terminate agreement
Daniel Politzer of J. P. Morgan reacted to Penn Entertainment’s third-quarter investors call.
“Penn had an eventful 3Q report,” Politzer wrote. “The big news is the premature wind down of ESPN Bet, which we view as a positive given it was expensive ($200 million+ per year) and fell short of expectations. However, there was disappointment that Penn did not commit to FY26 Interactive EBITDAR being meaningfully different than before; it’s still seen as breakeven or better.”
Red Rock Resorts and Caesars outlooks
Jefferies’ David Katz looked at the prospects for Red Rock Resorts and Caesars on November 10.
“Red Rock Resorts continues to project a clear path to the upside with the announcement of its expansion of the already successful Durango,” wrote Katz. “With this addition to the project pipeline we believe that there is now ~$200 million of incremental EBITDA within the next three years. On the other hand, the path to upside for Caesars is getting more complex. We think it’ll be difficult to grow in Las Vegas and its regional markets (we model just 2.2% growth for 2026 Adjusted EBITDA) and forecast digital to come in well below management’s $500 million target.”
Genius Sports looks positive
B Riley Securities’ Josh Nichols on November 4 wrote that Genius Sports “delivered a compelling 3Q report as multiple growth engines converged. Revenue of $166 million was +38% year-over-year (betting +28% and media +89%), marking the strongest quarterly growth since 1Q22 and outpacing consensus and our $156 million/$157 million while EBITDA of $34 million (+32% year-over-year) was nominally above consensus and our expectations. The recent European rights wins (European Leagues and Serie A) strengthened the company’s content portfolio and provided an immediate revenue uplift.”
