- Does Trump’s New Stake Reframe Red Rock Resorts’ (RRR) Political Risk And Brand Narrative In Gaming?
May 16, 2026
Earlier this week, financial disclosures showed former President Donald Trump initiated new positions in DraftKings and Red Rock Resorts while trimming other gaming holdings, revealing an extensive reshuffle of his multi-million-dollar investment trust in the first quarter of 2026. This move places a high-profile political figure among Red Rock Resorts’ shareholders, potentially increasing public scrutiny and interest in the company’s exposure to the US gaming market. We’ll now examine how Trump’s newly disclosed stake, and the attention it brings to Red Rock Resorts, could influence the existing investment narrative.
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Red Rock Resorts Investment Narrative Recap
To own Red Rock Resorts, you need to believe in the resilience of the Las Vegas locals market and the company’s ability to convert steady, incremental growth into shareholder returns despite ongoing capex and balance sheet pressure. Trump’s newly disclosed stake may lift visibility and trading interest, but it does not materially change the core near term catalyst around execution on property investments or the key risk tied to local economic conditions and debt coverage.
The recent Q1 2026 earnings release is the most relevant backdrop here, with revenue and earnings holding roughly in line with the prior year while the share price has pulled back and valuation signals point to potential undervaluation. That combination of stable operating performance and a weaker share price frames how any extra attention from Trump’s disclosure might intersect with existing catalysts such as future project returns, capital allocation and ongoing share repurchases.
But while Trump’s involvement may catch headlines, investors should also be aware of the company’s debt load and the risk that cash flows...
Read the full narrative on Red Rock Resorts (it's free!)
Red Rock Resorts' narrative projects $2.3 billion revenue and $247.8 million earnings by 2029. This requires 3.9% yearly revenue growth and about a $61.6 million earnings increase from $186.2 million today.
Uncover how Red Rock Resorts' forecasts yield a $67.31 fair value, a 31% upside to its current price.
Exploring Other PerspectivesRRR 1-Year Stock Price Chart
One Simply Wall St Community member currently estimates Red Rock Resorts' fair value at US$117.71, far above the recent share price. Readers should weigh this against the company’s concentrated exposure to the Las Vegas locals market and consider how different scenarios could affect that core earnings engine over time.
Story Continues
Explore another fair value estimate on Red Rock Resorts - why the stock might be worth just $117.71!
Decide For Yourself
Don't just follow the ticker - dig into the data and build a conviction that's truly your own.
A great starting point for your Red Rock Resorts research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision. Our free Red Rock Resorts research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Red Rock Resorts' overall financial health at a glance.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include RRR.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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- Consumer Discretionary - Gaming Solutions Stocks Q1 Earnings Review: Rush Street Interactive (NYSE:RSI) Shines
May 16, 2026
Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Rush Street Interactive (NYSE:RSI) and the best and worst performers in the consumer discretionary - gaming solutions industry.
The Consumer Discretionary sector, by definition, is made up of companies selling non-essential goods and services. When economic conditions deteriorate or tastes shift, consumers can easily cut back or eliminate these purchases. For long-term investors with five-year holding periods, this creates a structural challenge: the sector is inherently hit-driven, with low switching costs and fickle customers. As a result, only a handful of companies can reliably grow demand and compound earnings over long periods, which is why our bar is high and High Quality ratings are rare. Gaming solutions companies provide the technology infrastructure behind gambling—slot machines, table game systems, lottery terminals, sports-betting platforms, and back-end software for casinos and online operators. Tailwinds include the ongoing legalization of sports betting across U.S. states and international markets, growing adoption of digital and mobile wagering, and casino operators' demand for data-driven player engagement tools. However, headwinds include stringent and evolving regulatory requirements across jurisdictions, high upfront R&D costs to develop next-generation platforms, and customer concentration risk given the limited number of large casino operators. Increasing competition from in-house technology development by major operators also pressures demand.
The 6 consumer discretionary - gaming solutions stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.9%.
While some consumer discretionary - gaming solutions stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.4% since the latest earnings results.
Best Q1: Rush Street Interactive (NYSE:RSI)
Specializing in online casino gaming and sports betting, Rush Street Interactive (NYSE:RSI) is an operator of digital gaming platforms.
Rush Street Interactive reported revenues of $370.4 million, up 41.1% year on year. This print exceeded analysts’ expectations by 11.3%. Overall, it was a stunning quarter for the company with a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ revenue estimates.
Richard Schwartz, Chief Executive Officer of RSI, said, "We are pleased to report another strong quarter of results, setting new records once again for revenue, net income and adjusted EBITDA.”
Story Continues
Rush Street Interactive Total Revenue
Rush Street Interactive achieved the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 14.6% since reporting and currently trades at $27.52.
Is now the time to buy Rush Street Interactive? Access our full analysis of the earnings results here, it’s free.
Inspired (NASDAQ:INSE)
Specializing in digital casino gaming, Inspired (NASDAQ:INSE) is a provider of gaming hardware, virtual sports platforms, and server-based gaming systems.
Inspired reported revenues of $57.2 million, down 5.3% year on year, falling short of analysts’ expectations by 5.8%. However, the business still had a strong quarter with a beat of analysts’ EPS and adjusted operating income estimates.Inspired Total Revenue
The market seems content with the results as the stock is up 2.1% since reporting. It currently trades at $7.35.
Is now the time to buy Inspired? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: PlayStudios (NASDAQ:MYPS)
Founded by a team of former gaming industry executives, PlayStudios (NASDAQ:MYPS) offers free-to-play digital casino games.
PlayStudios reported revenues of $58.41 million, down 6.9% year on year, exceeding analysts’ expectations by 9.4%. Still, it was a slower quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
PlayStudios delivered the slowest revenue growth in the group. As expected, the stock is down 11.6% since the results and currently trades at $0.45.
Read our full analysis of PlayStudios’s results here.
Accel Entertainment (NYSE:ACEL)
Established in Illinois, Accel Entertainment (NYSE:ACEL) is a provider of electronic gaming machines and interactive amusement terminals to bars and entertainment venues.
Accel Entertainment reported revenues of $351.6 million, up 8.5% year on year. This result surpassed analysts’ expectations by 2.3%. Aside from that, it was a mixed quarter as it also produced a beat of analysts’ EPS estimates but a miss of analysts’ adjusted operating income estimates.
The stock is down 8% since reporting and currently trades at $11.48.
Read our full, actionable report on Accel Entertainment here, it’s free.
DraftKings (NASDAQ:DKNG)
Getting its start in daily fantasy sports, DraftKings (NASDAQ:DKNG) is a digital sports entertainment and gaming company.
DraftKings reported revenues of $1.65 billion, up 16.8% year on year. This print was in line with analysts’ expectations. Taking a step back, it was a satisfactory quarter as it also logged a solid beat of analysts’ adjusted operating income estimates but full-year revenue guidance missing analysts’ expectations.
DraftKings had the weakest full-year guidance update among its peers. The company reported 4.2 million users, down 2.3% year on year. The stock is down 2.5% since reporting and currently trades at $24.59.
Read our full, actionable report on DraftKings here, it’s free.
Market Update
Late in 2025 into early 2026, there was hand wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure?
These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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- DraftKings Eyes Prediction Markets as ‘Next Evolution' as Sportsbook Growth Holds Strong
May 16, 2026 · marketbeat.com
DraftKings NASDAQ: DKNG is positioning prediction markets as a major growth opportunity while maintaining that its core online sports betting and iGaming businesses remain strong, according to comments made during a fireside discussion hosted by MoffettNathanson analyst Robert Fishman.
- Why DraftKings (DKNG) Stock Is Up Today
May 16, 2026
What Happened?
Shares of fantasy sports and betting company DraftKings (NASDAQ:DKNG) jumped 2.2% in the afternoon session after analysts at Truist Securities reiterated a Buy rating on the company's shares.
The firm highlighted DraftKings' strong business performance in the first quarter, noting that the momentum continued into the second quarter. This positive commentary followed the company's announcement of a new feature for its prediction market platform called "Combos," which allows users to bundle different predictions into a single trade for a larger potential payout, similar to a parlay in sports betting.
The developments helped investors look past the company's recent mixed first-quarter report, which showed strong revenue growth but fell short of estimates for earnings per share and monthly unique payers.
After the initial pop the shares cooled down to $25.06, up 2.2% from previous close.
Is now the time to buy DraftKings? Access our full analysis report here, it’s free.
What Is The Market Telling Us
DraftKings’s shares are very volatile and have had 20 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 12.7% on the news that the company issued a disappointing financial outlook for 2026 that fell short of analysts' expectations.
DraftKings projected its 2026 revenue to be $6.7 billion at the midpoint, below the consensus estimate of approximately $7.3 billion. The company also gave a forecast for adjusted EBITDA of $800 million at the midpoint, well under the $980.6 million analysts had anticipated. This weaker-than-expected guidance overshadowed the company's fourth-quarter results. In the quarter, revenue grew 42.8% from the prior year to $1.99 billion, meeting expectations, but its adjusted earnings per share of $0.36 missed the consensus forecast of $0.41.
DraftKings is down 29.7% since the beginning of the year, and at $25.06 per share, it is trading 48% below its 52-week high of $48.23 from August 2025. Investors who bought $1,000 worth of DraftKings’s shares 5 years ago would now be looking at only $595.06.
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- Vegas casino pulls plug on prediction market conference amid Nevada crackdown
May 15, 2026 · nypost.com
The Nevada Gaming Commission sued the company over its sports event contracts, and the platform was briefly barred from operating in the state earlier this year, according to Barron's.
- NFL wants certain trading contracts banned from prediction markets like 'first play of game,' injuries
May 15, 2026
The National Football League outlined to the Commodities and Futures Trading Commission its views on how sports-related prediction markets should be regulated as the industry continues to experience massive growth, according to a letter reviewed by CNBC.
Recommendations include banning certain event contracts and raising the age requirement for participation.
Senior vice president for government affairs and public policy for the NFL Brendon Plack penned the letter on Friday to CFTC Chairman Michael Selig, where regulators are currently in a rulemaking process regarding the markets. Plack said the slew of recommendations are to preserve the ethics of the league.
"These suggestions are aimed at (i) protecting the integrity of the sporting events to which the prediction contracts relate, and (ii) protecting participants in these prediction markets from fraudulent or manipulative behavior," he wrote.
The NFL wants a number of contracts they deem to be easily manipulable by a singular person banned, like on if a kicker will miss a field goal or a quarterback's first pass will be incomplete. Contracts on things that are "knowable in advance" like the first play of the game or trading on "inherently objectionable" events like injuries should also be restricted, the NFL said.
Plack also wrote that the league wants "mentions" contracts for broadcasters, where participants put money on different words they think an individual will say on television, prohibited too.
The NFL also called for raising the age requirement for participants in sports-related prediction markets to 21 years old. That would align with typical age requirements for online sports betting, but prediction markets currently allow users starting at 18 years old to trade on their platforms.
Plack consistently refers to state-level gambling regulations as a model to follow when developing guardrails for sports-related prediction market contracts. He even recommends the National Futures Association enter agreements with state gaming regulatory authorities to share data and improve enforcement mechanisms to catch individuals who shouldn't be allowed to trade.
However, Selig views these markets, including the sports-related ones, as different from gambling. He reiterated to Axios this week that sportsbooks and these contracts are "two separate things."
The CFTC has taken several states to court over their legal interventions with prediction market platforms. States argue their power to regulate sports betting means they have jurisdiction over these platforms, while the commission argues these contracts are swaps and thus fall under its regulatory power.
Other recommendations from the NFL include a request for the CFTC to create a unique certification process for contracts that are related to an individual player's performance or susceptible to manipulation. Currently, most event contracts are approved through a self-certification process by the prediction market platforms.
It's not just public sector regulators struggling with the arrival of these platforms. Sportsbook companies DraftKings and FanDuel parent Flutter have seen their stocks suffer in the past year as prediction markets' sports business has grown.
Plack also writes the league believes prediction market platforms should enter agreements with sport governing bodies to establish and enforce a list of prohibited participants in sports event contracts, including league employees to minimize chances of insider trading.
The league also believes platforms should be required to ban margin trading, a risky practice where borrowed money is traded, to protect consumers. "The permittance of event contracts that are not fully collateralized, as some have suggested, particularly related to sports markets, could amplify addictive behavior and loss risk," Plack wrote.
— CNBC's Contessa Brewer, Jessica Golden and Ananya Chetia contributed reporting
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- Morgan Stanley reveals new DraftKings stock price target
May 15, 2026
DraftKings investors have been waiting for the company to prove that its online betting business can keep expanding while new growth bets start to take shape.
In a Morgan Stanley note shared with TheStreet, analyst Stephen Grambling and his team lowered their DraftKings price target to $39 from $40, while maintaining an Overweight rating on the stock. The new target still implies roughly 60% upside from DraftKings’ May 12 closing price of $24.61.
The target cut was modest, and the broader call remains bullish. Morgan Stanley argues that DraftKings appears to be getting little value from investors for prediction markets, future iGaming legalization, and other growth opportunities that could become more important over time.
DraftKings spending weighs on near-term estimates
Morgan Stanley adjusted its forecasts after DraftKings’ first-quarter commentary and the company’s latest outlook for prediction-market spending.
The bank now expects DraftKings handle growth of about 6% in 2026 and 5% in 2027. It also raised its second-quarter 2026 handle growth forecast to about 8%, helped by better-than-expected April growth and the FIFA World Cup beginning in June.
The tradeoff is spending. Morgan Stanley expects prediction-market marketing investment to be concentrated in the second and third quarters, with $100 million modeled in the second quarter and $125 million in the third quarter. That pushes the firm’s 2026 adjusted EBITDA estimate down to $767 million from $791 million, below the midpoint of DraftKings’ guidance range.
Morgan Stanley also lowered its 2027 adjusted EBITDA estimate to $1.33 billion from $1.34 billion. Revenue estimates moved higher, with the firm now projecting $6.94 billion in 2026 revenue and $8.03 billion in 2027 revenue.Analyst Stephen Grambling and his team lowered their DraftKings price target to $39 from $40SOPA Images via Getty Images
Prediction markets become a key swing factor
The prediction-market push is one of the more interesting pieces of the DraftKings story, even if it creates near-term pressure on profitability.
In the Morgan Stanley research note, the firm said DraftKings’ prediction markets reached an annualized volume of about $1 billion in April, equal to roughly $83 million of notional volume, without marketing or promotions. That suggests the product already has some early traction before the company begins a heavier promotional push.
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Morgan Stanley expects those investments to dampen fiscal 2026 results. The firm also sees a potential longer-term benefit if the spending helps DraftKings build a larger platform while more states consider online sports betting and iGaming legalization.
Story Continues
The bank moved its forecast for Minnesota online sports betting legalization to the second half of 2027 from the second half of 2026. It also pushed its expected Maine iGaming launch to year-end 2026 from the third quarter of 2026.
Core valuation helps support the bullish case
Morgan Stanley’s strongest argument centers on what DraftKings may already be worth without giving much credit to its biggest growth options.
The firm separated DraftKings’ core iGaming and online sports betting business from new markets and prediction markets. Using mature-market multiples, Morgan Stanley estimated 2026 core adjusted EBITDA of $1.09 billion, including $625 million from iGaming and $467 million from online sports betting.
The bank then assigned zero value to prediction markets and future iGaming markets in that framework. Even under that harsher approach, Morgan Stanley said the implied downside was about 15% from the current price cited in the note.
That is the crux of the bullish call. Morgan Stanley sees about 160% upside in its bull case compared with roughly 25% downside in its bear case, giving the firm confidence that DraftKings still has a favorable risk-reward setup.
DraftKings stock still depends on execution
Morgan Stanley’s $39 target is based on a 50/50 blend of an EV/EBITDA valuation and a 10-year discounted cash flow model. The EV/EBITDA approach produces a $37 value, while the DCF produces a $41 value, leading to the blended $39 target.
The firm also noted that DraftKings trades at about 31 times 2026 adjusted EBITDA and 13 times 2027 adjusted EBITDA, while Morgan Stanley forecasts about 45% adjusted EBITDA compound annual growth from 2025 through 2027.
For DraftKings, the next stage of the stock story comes down to whether management can keep the core business moving while absorbing the cost of new growth bets. Morgan Stanley’s latest call suggests that even after a small price-target cut, the bank still sees a much bigger upside case than the market is currently pricing in.
Related: JPMorgan doubles down on stock market message for 2026
This story was originally published by TheStreet on May 15, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.
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- Statutory Profit Doesn't Reflect How Good DraftKings' (NASDAQ:DKNG) Earnings Are
May 15, 2026
DraftKings Inc.'s (NASDAQ:DKNG) robust earnings report didn't manage to move the market for its stock. We did some digging, and we found some concerning factors in the details.
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Examining Cashflow Against DraftKings' Earnings
As finance nerds would already know, the accrual ratio from cashflow is a key measure for assessing how well a company's free cash flow (FCF) matches its profit. In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. This ratio tells us how much of a company's profit is not backed by free cashflow.
As a result, a negative accrual ratio is a positive for the company, and a positive accrual ratio is a negative. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking.
DraftKings has an accrual ratio of -0.34 for the year to March 2026. That implies it has very good cash conversion, and that its earnings in the last year actually significantly understate its free cash flow. To wit, it produced free cash flow of US$569m during the period, dwarfing its reported profit of US$58.6m. DraftKings' free cash flow improved over the last year, which is generally good to see. However, that's not all there is to consider. We can see that unusual items have impacted its statutory profit, and therefore the accrual ratio.
View our latest analysis for DraftKings
That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.
The Impact Of Unusual Items On Profit
Surprisingly, given DraftKings' accrual ratio implied strong cash conversion, its paper profit was actually boosted by US$48m in unusual items. While it's always nice to have higher profit, a large contribution from unusual items sometimes dampens our enthusiasm. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. And that's as you'd expect, given these boosts are described as 'unusual'. We can see that DraftKings' positive unusual items were quite significant relative to its profit in the year to March 2026. As a result, we can surmise that the unusual items are making its statutory profit significantly stronger than it would otherwise be.
Story Continues
Our Take On DraftKings' Profit Performance
DraftKings' profits got a boost from unusual items, which indicates they might not be sustained and yet its accrual ratio still indicated solid cash conversion, which is promising. Based on these factors, it's hard to tell if DraftKings' profits are a reasonable reflection of its underlying profitability. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. To help with this, we've discovered 2 warning signs (1 is a bit concerning!) that you ought to be aware of before buying any shares in DraftKings.
Our examination of DraftKings has focussed on certain factors that can make its earnings look better than they are. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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- Is DraftKings (DKNG) a Buy as Wall Street Analysts Look Optimistic?
May 15, 2026
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?
Let's take a look at what these Wall Street heavyweights have to say about DraftKings (DKNG) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
DraftKings currently has an average brokerage recommendation (ABR) of 1.76, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 35 brokerage firms. An ABR of 1.76 approximates between Strong Buy and Buy.
Of the 35 recommendations that derive the current ABR, 22 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 62.9% and 8.6% of all recommendations.
Brokerage Recommendation Trends for DKNGBroker Rating Breakdown Chart for DKNG
Check price target & stock forecast for DraftKings here>>>
While the ABR calls for buying DraftKings, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
ABR Should Not Be Confused With Zacks Rank
Although both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
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Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.
Is DKNG Worth Investing In?
Looking at the earnings estimate revisions for DraftKings, the Zacks Consensus Estimate for the current year has declined 3.1% over the past month to $1.14.
Analysts' growing pessimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates lower, could be a legitimate reason for the stock to plunge in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #4 (Sell) for DraftKings. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, it could be wise to take the Buy-equivalent ABR for DraftKings with a grain of salt.
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DraftKings Inc. (DKNG) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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- DraftKings Inc. (DKNG) Presents at MoffettNathanson's Media, Internet & Communications Conference Transcript
May 15, 2026 · seekingalpha.com
DraftKings Inc. (DKNG) Presents at MoffettNathanson's Media, Internet & Communications Conference Transcript
