Market Overview

Return On Capital Employed Overview: DraftKings

Share:

During Q2, DraftKings's (NASDAQ: DKNG) reported sales totaled $70.93 million. Despite a 22221.12% in earnings, the company posted a loss of $160.44 million. DraftKings collected $88.54 million in revenue during Q1, but reported earnings showed a $718.80 thousand loss.

What Is ROCE?

Changes in earnings and sales indicate shifts in DraftKings’s Return on Capital Employed, a measure of yearly pre-tax profit relative to capital employed in a business. Generally, a higher ROCE suggests successful growth in a company and is a sign of higher earnings per share for shareholders in the future. In Q2, DraftKings posted an ROCE of -0.07%.

It is important to keep in mind ROCE evaluates past performance and is not used as a predictive tool. It is a good measure of a company's recent performance, but several factors could affect earnings and sales in the near future.

ROCE is an important metric for the comparison of similar companies. A relatively high ROCE shows DraftKings is potentially operating at a higher level of efficiency than other companies in its industry. If the company is generating high profits with its current level of capital, some of that money can be reinvested in more capital which will lead to higher returns and earnings per share growth.

In DraftKings's case, the ROCE ratio shows the amount of assets may not be helping the company achieve higher returns. Investors may take this into account before making any long-term financial decisions.

Q2 Earnings Recap

DraftKings reported Q2 earnings per share at $-0.55/share, which did not meet analyst predictions of $-0.19/share.

 

Related Articles (DKNG)

View Comments and Join the Discussion!

Posted-In: Earnings News Sports Tech General

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com