-- DraftKings (DKNG) integrating market-making into Predictions is seen as a key catalyst for increased marketing spend, as it could generate higher lifetime value and customer acquisition cost thresholds, Oppenheimer said in a note emailed Wednesday.
The brokerage expects Q1 revenue and earnings before interest, taxes, depreciation and amortization of $1.6 billion and $143 million, respectively, compared with Street consensus of $1.63 billion and $150 million. It forecasts Q2 revenue and EBITDA of $1.67 billion and $284 million, compared with Street estimates of $1.57 billion and $271 million, according to the note.
Oppenheimer believes April had strong holds, and anecdotal usage suggests levers around profit-boosts and early wins could support May handle as comparisons ease.
The firm said it has yet to see Predictions iterations that command higher marketing spend into the World Cup, but that could change if market-making accelerates.
DraftKings is set to report Q1 results Thursday.
Oppenheimer maintained an outperform rating on DraftKings with a $35 price target.
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