Flutter Entertainment (FLUT 1.57%), the parent company of FanDuel online sports betting, has been on a losing streak so far in 2026. Flutter's stock price has plummeted 56% year to date to a nearly four-year low of $93 on May 11. The last time it closed that low was July 18, 2022, when it hit $91.
For this leader in its industry, the sharp decline is stunning. The revenue results have been solid, but several factors have contributed to the downward spiral for this growth stock.
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Overall, Flutter increased its revenue by 17% in the first quarter, but its average monthly players declined by 3%. Within FanDuel, its biggest property, revenue increased 10% year over year in the first quarter, while iGaming revenue jumped 28%.
In the U.S., sportsbook revenue only gained 1%, while international sportsbook revenue surged 22%. But average monthly players in the U.S. dropped 1% in the quarter, while the handle, the total amount bet, dropped 9%. That suggests that FanDuel is losing engagement.
Flutter also lowered its guidance for fiscal 2026, due in part to unfavorable sports results (i.e., bettors won more wagers than anticipated). A combination of less engagement and unfavorable results is less than optimal. With the reduced guidance, it expects 12% revenue growth and 1% growth in earnings before interest, taxes, depreciation, and amortization.
Time for a comeback?
Flutter stock has also been rocked by management changes. FanDuel CEO Amy Howe left the company in the first quarter and has been replaced by Christian Genetski, promoted from president of FanDuel.
Part of FanDuel's earnings woes have stemmed from costs associated with recent acquisitions and investments in its new FanDuel Predicts, a prediction market option. And expenses were higher across the board for sales and marketing, technology, costs of sales, and other line items as it invests to maintain its lead in this highly competitive industry.
New initiatives have been rolled out to improve its earnings, including a customer engagement program that includes early win payouts, a rewards and loyalty program, simplified parlays, among other new features. Early results indicate the changes are working.
NYSE: FLUT
Key Data Points
The other new rollout is an initiative to realize $300 million in savings by the end of 2027, achieved through eliminating underperforming assets and optimizing costs.
At a nearly four-year low, Flutter shares can't really go much lower. The stock, while it still has a high trailing price-to-earnings ratio, has a dirt-cheap forward valuation. It is trading at just 13 times forward earnings with a price-to-sales ratio of only 1.05. Its five-year price/earnings-to-growth (PEG) ratio is only 0.19 -- which means it is deeply undervalued relative to its long-term growth.
With its rock-bottom valuation, Flutter looks like a great buy right now, given its market leadership in sports betting, cost and engagement enhancements, and new market opportunities, like prediction markets.
Wall Street is also very bullish on Flutter. It has a median price target of $160 per share, suggesting a 67% return over the next 12 months. Among recent calls, the Australian investment bank Macquarie lowered its share price target by $10 but still has a $190 prediction, which would be more than double the current price.
