Flutter Entertainment (NYSE: FLUT), the parent company of FanDuel, has endured a brutal 2026, with shares down 57% year to date.
The company’s latest quarterly results compounded investor pain, as Flutter missed on earnings per share, slashed full-year guidance, and announced a CEO change.
Shares dropped 11% following the earnings print, deepening losses for shareholders already sitting on steep declines this year.
Despite the carnage, Michael Burry of Scion Asset Management sees a buying opportunity where most others see a falling knife.
In a recent Substack post, Burry disclosed that he sold his position in DraftKings (NASDAQ: DKNG) and loaded up on Flutter shares, according to several media reports.
The move puts Burry at odds with the broader hedge fund community, which has been rapidly reducing its exposure to the stock throughout this year.
Insider Monkey’s proprietary database of over 900 funds shows only 57 funds held stakes in Flutter as of the end of Q1, down sharply from 79 funds a quarter earlier.
That declining institutional conviction tracks closely with the stock’s steep year-to-date selloff, painting a picture of widespread pessimism among professional investors.
Flutter’s Q2 results gave those skeptics plenty of ammunition, with revenue rising just 3% year over year despite the quarter including FIFA World Cup matches.
Adjusted EBITDA fell 45%, reflecting heavy spending on the US prediction market platform FanDuel Predicts, the Arkansas market launch, and World Cup marketing costs.
Full-year revenue and Adjusted EBITDA guidance was also cut, removing a key pillar of support for investors hoping for a second-half recovery.
Burry’s bull case rests partly on the regulatory environment surrounding prediction markets, which have gained significant traction with consumers in recent years.
Kalshi, a leading prediction market platform, is running roughly $40 billion in annual volume without paying state gaming taxes, a situation Burry believes regulators will eventually address.
If authorities crack down on unregulated prediction markets, Flutter would benefit directly through its own FanDuel Predicts platform, which the company is building to compete regardless.
FanDuel still commands roughly 41% of the US sportsbook market, and together with DraftKings the two operators control approximately 78% of the total market.
US iGaming revenue grew 14% during the quarter, reflecting FanDuel’s strengthening market share lead in what has become a more stable segment than traditional sportsbook.
International markets also held up relatively well, with revenue growing 4%, offering some geographic diversification against the domestic pressures weighing on results.
On a valuation basis, Flutter trades at 10.14x forward EV/EBITDA and 17.45x forward price-to-earnings, roughly in line with the sector median on both metrics.
The most compelling figure for growth-oriented investors is the PEG ratio of 0.83, well below the sector median of 1.47, suggesting the stock is cheap relative to expected earnings growth.
Bears counter that the US slowdown may not be temporary, and that a leadership transition following the CEO change introduces meaningful execution risk at a critical moment for the business.
