Wrapping up Q1 earnings, we look at the numbers and key takeaways for the gaming solutions stocks, including DraftKings (NASDAQ: DKNG) and its peers.

Gaming solution companies operate in a dynamic and evolving market, and the digital transformation of the gaming industry presents significant opportunities for innovation and growth, whether it be immersive slot machine terminals or mobile sports betting. However, the gaming solution industry is not without its challenges. Regulatory compliance is a crucial consideration as companies must navigate a complex and often fragmented regulatory landscape across different jurisdictions. Changes in regulations can impact product offerings, operational practices, and market access, requiring companies to maintain flexibility and adaptability in their business strategies. Additionally, the competitive nature of the industry necessitates continuous investment in research and development to stay ahead of competitors and meet evolving consumer demands.

The 7 gaming solutions stocks we track reported a mixed Q1. As a group, revenues missed analysts’ consensus estimates by 2.4%.

Luckily, gaming solutions stocks have performed well with share prices up 12% on average since the latest earnings results.

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 $1.41 billion, up 19.9% year on year. This print fell short of analysts’ expectations by 3.1%. Overall, it was a slower quarter for the company with full-year EBITDA guidance missing analysts’ expectations.

“Recent product enhancements are driving outperformance in our core value drivers, and our customer metrics continue to be strong through an evolving macroeconomic environment,” said Jason Robins, DraftKings’ Chief Executive Officer and Co-founder.

DraftKings delivered the weakest full-year guidance update of the whole group. The company reported 4.3 million users, up 26.5% year on year. Interestingly, the stock is up 24.1% since reporting and currently trades at $43.94.

Is now the time to buy DraftKings? Access our full analysis of the earnings results here, it’s free.

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 $262.4 million, up 20.7% year on year, outperforming analysts’ expectations by 0.5%. The business had a strong quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ adjusted operating income estimates.

Rush Street Interactive achieved the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 21.5% since reporting. It currently trades at $14.73.

Is now the time to buy Rush Street Interactive? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: Light & Wonder (NASDAQ: LNW)

With names as crazy as Ultimate Fire Link Power 4 for its products, Light & Wonder (NASDAQ: LNW) is a gaming company supplying the casino industry with slot machines, table games, and digital games.

Light & Wonder reported revenues of $774 million, up 2.4% year on year, falling short of analysts’ expectations by 4.3%. It was a softer quarter as it posted a miss of analysts’ Gaming revenue estimates and a significant miss of analysts’ EPS estimates.

Interestingly, the stock is up 4.9% since the results and currently trades at $98.23.

Read our full analysis of Light & Wonder’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 $323.9 million, up 7.3% year on year. This result beat analysts’ expectations by 1.6%. Overall, it was a strong quarter as it also logged a solid beat of analysts’ EPS estimates and a decent beat of analysts’ video gaming terminals sold estimates.

Accel Entertainment achieved the biggest analyst estimates beat among its peers. The stock is up 14% since reporting and currently trades at $12.27.

Read our full, actionable report on Accel Entertainment here, it’s free.

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 $62.71 million, down 19.4% year on year. This print missed analysts’ expectations by 1.4%. More broadly, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ adjusted operating income estimates but a miss of analysts’ daily active users estimates.

PlayStudios delivered the highest full-year guidance raise but had the slowest revenue growth among its peers. The company reported 2.63 million monthly active users, down 24.7% year on year. The stock is down 11.6% since reporting and currently trades at $1.22.

Read our full, actionable report on PlayStudios here, it’s free.

Market Update

The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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