Flutter’s bold forecast spurs market gains and expands U.S. reach

Kateryna Skrypnyk September 26, 2024

This week, just ahead of its Investor Day presentation, Flutter Entertainment (FLUT), the parent company of FanDuel, unveiled a mid-term development plan for 2027 and announced a new $5 billion share buyback program. FLUT shares rose at the start of the day, leading the market, with competitors like DraftKings also seeing gains in response.

FanDuel expects $21 billion in revenue by 2027

FanDuel, a subsidiary of Flutter, has projected its revenue in the U.S. and other regions to reach $21 billion by 2027, representing a three-year compound annual growth rate (CAGR) of 14 percent. The company expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to exceed $5 billion by 2027, with adjusted EBITDA margins rising to 25 percent.

The betting company also anticipates its sportsbook’s gross gaming revenue (GGR) margin to hit 15% by 2027, with a long-term target of 16 percent. Flutter predicts FanDuel’s net gaming revenue (NGR) margin will settle at 12 percent in the long run. By mid-2027, revenue from existing states where sports betting and gambling products are legal is expected to reach $9.7 billion. Flutter also reiterated its long-term forecast for adjusted EBITDA margins to be in the range of 25 percent to 30 percent, expecting to reach 25 percent by 2027.

FanDuel’s parent company shares up 34 percent this year

Flutter’s shares surged over 5 percent on Wednesday, breaking out of the buying zone and hitting an all-time intraday high. On 17 September, FLUT shares climbed above the 226.40 mark, establishing a 27-week base. Year-to-date, Flutter shares have gained 34 percent.

Meanwhile, rival DraftKings (DKNG) shares jumped 5 percent on Wednesday following the report. DKNG stock also rebounded strongly from its 200-day moving average, having fallen below this long-term technical level in mid-July and reclaiming it last week. DraftKings shares have risen 16.6 percent this year.

North American market volume to reach $70 billion

Flutter estimates the total addressable market (TAM) in North America will be around $70 billion, with the U.S. contributing $63 billion to that total.

The company sees “significant” opportunities for further expansion as several states have yet to regulate its betting products. FanDuel remains optimistic about reaching 80 percent of the U.S. population with its sportsbook offerings and 25 percent with its gambling products.