Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Sports betting stocks outlook
J. P. Morgan’s Estelle Weingrod commented on sports betting stocks on March 2:
“2026 is proving to be more of an investment year than expected, reflecting a disappointing profitability ramp up in the U.S. (just 15% flow-thru vs. peers’ ~30%) as investment in prediction markets ramps and U.S. handle growth slows. For Q4 25, we attribute Flutter’s weak U.S. performance to “unfavorable recycling” (i.e., customers lost too much), inefficient promo spend, less compelling NFL matchups, and higher-than-forecast operating expenses (sales/marketing); in International, results were also softer than forecast on U.K. sports.
“Looking ahead, our concerns are twofold: (1) the U.S. sports betting industry has begun to slow, and this fear is being exacerbated by rising competitive intensity and potential disruption (from prediction markets); and (2) uncertainty around what the company can achieve within prediction markets in terms of product quality, returns, and competitive positioning.”
Flutter outlook declines
Barry Jonas of Truist viewed Flutter’s prospects on February 26:
“Flutter missed Q4 and issued 2026 guidance below expectations given ongoing challenges in the U.S. and abroad. While we had called out FanDuel market share losses in our Year Ahead, we are surprised by the overall scale of the miss. Looking at guidance (which factors prediction investments), there’s now even a scenario where Draft Kings could generate more EBITDA than FanDuel. But with Flutter’s sizable equity selloff in the rear-view and numbers now reset, we’ll look for incremental improvements, including prospects for igaming legalization and prediction market development. We meaningfully lower ‘26E EBITDA by ~30% to guidance and our price target moves to $160 (from $260) on lower estimates and multiples.”
Inspired Entertainment shows promise
B Riley Associates’ Josh Nichols looked at Inspired Entertainment on March 2:
“Our revenue estimate of $79 million is above consensus of $76 million and -4.8% year-over-year, with the decline entirely attributable to the Holiday Parks divestiture that closed on November 11, as underlying operations ex-Leisure grew high single digits year-over-year. We model interactive at a record $16.6 million (+43% year-over-year, 21% of sales), building on momentum that we believe extended through December with another record-setting month for the segment, while virtual sports appears positioned to deliver its first quarter of positive year-over-year growth since 2023 at $10.3 million (+2% year-over-year), marking an important stabilization after seven consecutive quarters of declines.”
Penn shows improvement; Churchill Downs steady
David Katz of Jefferies on March 1 commented on Penn Entertainment and Churchill Downs’ outlooks:
“The critical element for gaming stocks’ productivity is growth, which highlights the stock action for this past week, with Penn Entertainment (+20%) and Churchill Downs (-1.9%). Penn Entertainment was driven by the reversal of negative digital EBTIDA growth in 2026, while Churchill Downs (-1.9%) continues to grind gradually higher on its Kentucky, Virginia, and (Kentucky) Derby growth projects. We maintain our view that Penn (Hold) could trade higher on negative reversal, while Churchill Downs grinds higher on actualizing growth (Buy).”
