In a challenging environment for any tech stock, the market has stung online betting platform DraftKings (DKNG) in particular as it is stuck in a monthslong slide and remains trapped below its sharply descending 10-week line. But Flutter Entertainment (FLUT) — the parent of DraftKings rival FanDuel — has shown rocky resilience as its stock takes aim at a buy point.
Does that mean Flutter is the better gamble for investors?
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FanDuel Vs. DraftKings
FanDuel and DraftKings are the two most popular sports betting sites in the U.S., with FanDuel boasting the largest market share.
As a top sports betting and iGaming operator, Flutter Entertainment’s properties reach beyond just FanDuel. Other Flutter-owned brands include Sky Betting & Gaming, Sportsbet, PokerStars, Paddy Power, Sisal and more.
In terms of who has the best sportsbook, The Sporting News gives the edge to FanDuel over DraftKings.
But what about the current action in both stocks? IBD Stock Checkup paints a mixed picture.
While neither sports a stellar grade, Flutter’s 68 Composite Rating tops the score of 49 for DraftKings. Flutter also beats DraftKings with a B+ Accumulation/Distribution Rating and 1.7 up/down volume ratio, compared to a C and 0.7 for DraftKings.
DraftKings, however, has the edge in another measure of demand. A total of 84 funds with an A+ or A rating from Investor’s Business Daily own shares of DraftKings. By comparison, 31 such funds have reported a position in Flutter stock.
While both companies have posted at least double-digit sales growth in each of the last eight quarters, DraftKings sports the stronger numbers. Over that period, DraftKings has posted quarterly sales gains ranging from 26% to 136%. Flutter Entertainment has generated gains of 14% to 46%.
In its June quarter, however, Flutter posted a 20% year-over-year revenue increase, pushing it just past $3.6 billion. That tripled the $1.1 billion in revenue for DraftKings, which marked a 26% gain from the prior-year quarter.
Earnings growth for DraftKings has been the more sporadic of the two online betting giants. In the second quarter, Flutter delivered a 53% earnings increase to $2.61 a share. DraftKings reported a 57% rise in profits to 22 cents a share.
Current Chart Action Favors Flutter Stock
September got off to a less-than-stellar start as the Nasdaq immediately sank below its 50-day moving average, sparking a drop in IBD’s recommended market exposure level.
As mentioned earlier, DraftKings stock remains mired in a downward slope, mostly living below its 10-week line since April. Flutter Entertainment, on the other hand, has perked up with its relative strength line on the rise since June.
Perhaps fitting for an online betting platform, Flutter is no stranger to volatility. One silver lining for its swings since July of last year is that the stock reset its base count along the way by undercutting its prior low in an earlier pattern. After forming a first-stage cup pattern from July 2023 to January of this year, Flutter stock has crafted a base-on-base formation.
The stock is showing handle-like action, which could offer a buy point at 215.19. That entry began to form as Flutter stock pulled back after gapping up over 8% on its Aug. 13 earnings report.
As the S&P 500 holds support at its 50-day line and the Nasdaq stands below that benchmark, see if investors keep placing their bets on Flutter Entertainment to break out as DraftKings remains in a downtrend.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
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