Flutter Sees Post-Earnings Boost as FanDuel Shows Signs of Recovery

Key Points

• Flutter Entertainment shares have fallen more than 60% from their August 2025 all-time high, now trading near $100 per share.
• Flutter's Q1 2026 revenue rose 17% year over year to $4.3 billion, though the company trimmed its full-year revenue and EBITDA guidance.
• FanDuel's average monthly players dropped 6% year over year, which Flutter attributes primarily to unfavorable bettor outcomes in Q4 2025 rather than prediction market competition.

Online betting giant Flutter Entertainment NYSE: FLUT has been one of the market’s biggest losers for the better part of a year. The stock topped $300 per share in July 2025, hit an all-time high in August, and has since come crashing down. Overall, shares have fallen more than 60% from the August high, and are now trading near $100 per share.

One of the top drags on the stock’s performance is the rising popularity of prediction markets, which offer an alternative to traditional forms of gambling. Robinhood Markets NASDAQ: HOOD, which partners with Kalshi, said Q1 2026 was a record quarter for prediction markets volume. It also noted that volume in April was on track to hit roughly $3 billion, or its second-highest month ever. Flutter shares fell around 1.4% the day after Robinhood’s report.

Flutter posted somewhat mixed results in its Q1 2026 earnings report, but investors still viewed it favorably, with the stock rising 2% afterward. Looking ahead, there is reason to believe that Flutter represents a compelling opportunity, given how drastically its shares are down.

Flutter Beats on Revenue, Then Trims 2026 Outlook

In Q1 2026, Flutter’s revenue rose by 17% year over year (YOY) to $4.3 billion, slightly exceeding estimates of $4.24 billion.

Adjusted earnings per share (EPS) fell by 22% YOY to $1.22, but moderately beat estimates of $1.09.

Revenue in the United States increased by 6% YOY, with Flutter’s iGaming business being particularly strong. There, revenue rose by 19% YOY, while its sports betting platform, FanDuel, grew by just 1% YOY.

Its international business achieved revenue growth of 18% YOY in constant currency. However, this was largely due to acquisitions, with the firm noting that organic revenue was "in line" with the prior year.

Notably, Flutter lowered its full-year guidance to account for multiple factors. Overall, the company’s revenue expectations fell to $18.3 billion from $18.4 billion previously. This was partly due to $95 million worth of unfavorable sports betting outcomes. Although this is not ideal, it reflects the risk of operating a sportsbook and is not overly worrisome.

Flutter also lowered expectations for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to about $2.87 billion (from $2.97 billion). This drop accounts for revenue impacts and $35 million of added costs to account for its launch of FanDuel in Arkansas. While it is a negative in the near term, the fact that the company is opening FanDuel in a new state is a long-term positive, expanding its market.

FanDuel Engagement Dipped, and Management Offered a Churn Explanation

Fears surrounding Flutter in the prediction market haven’t come without evidence.

For FanDuel, average monthly players (AMPs) dropped by 6% YOY, showing that many bettors left the platform. This adds weight to the idea that users are defecting to prediction markets.

Flutter argues that this has not been a primary reason for declining users. Still, the company estimates that prediction markets will have a “low single-digit” impact on future handle growth (handle is the total value of bets placed).

Rather, Flutter says that unusually favorable NFL outcomes for the company in Q4 2025 discouraged bettors. Essentially, bettors won less often than usual, causing them to stop betting in subsequent months, i.e., the first quarter. This is particularly true as FanDuel’s users skew more toward high-risk parlay bets than other platforms.

Flutter provided strong evidence to support this, saying that NFL gross revenue margins during Q4 were above average in 10 out of 11 weeks.

This is typically good for FanDuel, as it means keeping more of bettors' money, even if it can be a headwind for engagement afterward.

Still, FanDuel noted that trends are improving. For example, AMPs were down 5% YOY in January, but grew 1% YOY in March. Additionally, handle fell by 10% YOY in January, but only 4% YOY in March. This is likely evidence of bettors coming back over time after licking their wounds. Overall, management's commentary is reasonable, and pushes back on the idea that users are leaving in a significant way to prediction markets platforms.

The company is also rolling out features to mitigate future discouragement, including a loyalty program that rewards bettors for consistently wagering with points and rewards. Additionally, its Bet Protect+ offering allows bettors to pay a small fee to insure their bet, trading this for less upside if they win. Furthermore, the firm appointed Christian Genetski to lead FanDuel following the departure of Amy Howe.

Significant Potential in Flutter Remains After Q1 Report

Overall, Flutter’s results were encouraging, with the company taking real steps to address bettor churn on FanDuel.

These decisions can help the firm find the right balance between profitability and engagement among its parlay-heavy user base.

Flutter needs to treat its customer cohort with care, as prediction markets cannot easily replicate parlay-style betting at scale.

This is a key factor supporting the company’s outlook, as parlays are a highly margin-accretive revenue stream.

The MarketBeat consensus price target on Flutter sits just under $200, implying over 90% potential upside.

It is worth noting that price target updates after the company’s report are much lower, averaging around $140. Still, this figure implies significant upside of more than 35%, and all analysts issuing updates kept a Buy or equivalent rating on the stock.