Chad Beynon of Macquarie has picked DraftKings and FanDuel parent Flutter as two of his top gaming stocks for 2025.
He forecasts that online gaming, including both sports betting and online casino, will be the top gaming stock segment for 2025.
Growth should be around 25% this year, which is down compared to growth of up to 70% in past years, but he noted that several companies are close to hitting profit rates that will keep investors outside of gaming interested.
Targets, estimates for gaming stocks
Beynon included updated targets for most as well as estimates for digital EBITDA through 2027:
Company | Target (Change) | 2025 EBITDA(R) | 2026 EBITDA(R) | 2027 EBITDA(R) |
---|---|---|---|---|
Bally’s | N/A | nil | $28 million | $55 million |
Boyd | $74 (+$2) | $84 million | $92 million | $96 million |
Caesars | $47 (-$3) | $362 million | $470 million | $509 million |
DraftKings | $50 (-$1) | $950 million | $1.484 billion | $1.960 billion |
Flutter | $340 (no change) | $1.335 billion | $1.951 billion | $2.560 billion |
Genius | $13 (+$1) | $113 million | $151 million | $199 million |
MGM | $50 (-$3) | ($11 million) | $231 million | $345 million |
Penn Entertainment | $26 (-$1) | ($69 million) | $95 million | $222 million |
Rush Street Interactive | $16 (+$1) | $118 million | $160 million | $216 million |
DraftKings the ‘best large-cap’ stock
DraftKings is the “best large-cap way to play the US online market” as it has first-mover advantage, top technology and brand recognition with younger demographics, Beynon said.
That top position should be safe given DraftKings continues to invest in its business and technology while also growing revenue by double digits, he added.
The stock benefits from positive online gaming trends right now, including higher sports betting hold and a lower cost of customer acquisitions.
More notes for top gaming stocks
Beynon also dropped in brief notes on each company featured in his 2025 primer:
- Flutter: The stock is not yet trading like a “Rule of 40” stock, which is when revenue growth rate and profit margin add up to at least 40 percentage points, Beynon said. If the FanDuel parent sticks to its current plan, FLUT could be around $600 a share in four years, he added.
- Genius: The data supplier should grow as the US sports betting market grows, Beynon said. It is not just a direct benefactor of such growth but also a facilitator given its introduction of BetVision, he added.
- MGM Resorts: BetMGM has a “solid position” as the No. 3 online gaming operator, the leader of all companies behind DraftKings and FanDuel. BetMGM should be profitable in 2025, Beynon added, but digital EBITDA is still forecasted at a loss given MGM’s international digital business.
- Penn Entertainment: The path to profitability for ESPN Bet is a bit behind schedule since the plan was to break even in 2025, Beynon said. Recent upgrades, including account linking, a better product and hold improvements can drive “significant growth,” he added.
- Rush Street Interactive: The company showed domestic monthly active user growth in six straight quarters, with average revenue continuing to rise as well. The BetRivers parent is “emerging as a low-risk way to play the expanding online market,” based on its lower exposure to sports and its international presence in Canada and Latin America.