As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q4. Today, we are looking at gaming solutions stocks, starting with DraftKings (NASDAQ: DKNG).

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 Q4. As a group, revenues beat analysts’ consensus estimates by 1.5%.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 18% 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 $1.39 billion, up 13.2% year on year. This print fell short of analysts’ expectations by 0.9%, but it was still a strong quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.

“We continued to efficiently acquire and engage customers, expand structural sportsbook hold percentage and optimize promotional reinvestment in fiscal year 2024, while we simultaneously experienced customer-friendly sport outcomes,” said Jason Robins, DraftKings’ Chief Executive Officer and Co-founder.

DraftKings scored the highest full-year guidance raise of the whole group. The company reported 4.8 million users, up 37.1% year on year. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 27.5% since reporting and currently trades at $33.67.

We think DraftKings is a good business, but is it a buy today? Read our full report here, it’s free.

Best Q4: 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 $254.2 million, up 31.1% year on year, outperforming analysts’ expectations by 3.4%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates.

Rush Street Interactive delivered the fastest revenue growth among its peers. The market seems unhappy with the results as the stock is down 18.1% since reporting. It currently trades at $10.89.

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

Weakest Q4: 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 $67.78 million, down 12.1% year on year, falling short of analysts’ expectations by 1.4%. It was a disappointing quarter as it posted a miss of analysts’ daily active users estimates and full-year revenue guidance missing analysts’ expectations significantly.

PlayStudios delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. The company reported 2.72 million monthly active users, down 19% year on year. As expected, the stock is down 8.6% since the results and currently trades at $1.38.

Read our full analysis of PlayStudios’s results here.

Churchill Downs (NASDAQ: CHDN)

Famous for hosting the Kentucky Derby, Churchill Downs (NASDAQ: CHDN) operates a horse racing, online wagering, and gaming entertainment business in the United States.

Churchill Downs reported revenues of $624.2 million, up 11.2% year on year. This print topped analysts’ expectations by 0.9%. More broadly, it was a mixed quarter as it also logged a decent beat of analysts’ EBITDA estimates but a miss of analysts’ Horse Racing revenue estimates.

The stock is down 15.7% since reporting and currently trades at $100.72.

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

Inspired (NASDAQ: INSE)

Specializing in digital casino gaming, Inspired (NASDAQ: INSE) is a provider of gaming hardware, virtual sports platforms, and server-based gaming systems.

Inspired reported revenues of $83 million, up 2.2% year on year. This result surpassed analysts’ expectations by 5.3%. Overall, it was a strong quarter as it also logged a decent beat of analysts’ EPS and EBITDA estimates.

Inspired delivered the biggest analyst estimates beat among its peers. The stock is down 37.7% since reporting and currently trades at $5.20.

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

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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