DraftKings
DKNG
$26.14
+2.83%
DraftKings Inc. is a leading digital sports entertainment and gaming company that operates online sports betting, iGaming, daily fantasy sports, and, more recently, prediction markets, primarily in the United States and Canada. The company holds a top-two or -three revenue share position in most states where it competes, making it a dominant player in the highly competitive U.S. online gambling market. Currently, the stock is under pressure due to a sharp decline in its share price over the past year, driven by concerns over rising competition, regulatory uncertainty, and heavy investments in new verticals like prediction markets. However, recent news highlights strong underlying growth in prediction markets and a potential regulatory moat from a bipartisan Senate bill, which has sparked renewed optimism among investors despite near-term earnings misses.…
DKNG
DraftKings
$26.14
Related headlines
DKNG 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on DraftKings's 12-month outlook, with a consensus price target around $34.79 and implied upside of +33.1% versus the current price.
Average Target
$34.79
0 analysts
Implied Upside
+33.1%
vs. current price
Analyst Count
—
covering this stock
Price Range
$18 - $76
Analyst target range
The wide target spread and the high number of analysts (35) indicate that DraftKings is a well-covered stock with significant institutional interest. The consensus 'Buy' rating and the average target price implying 57% upside suggest that analysts believe the current price is undervalued. However, the low target of $18 is only 19% below the current price, indicating that even the most bearish analysts see limited downside. This asymmetry in the target range, combined with the positive recent ratings, suggests that the risk-reward profile is favorable for investors with a long-term horizon, though the high volatility (beta of 1.63) and regulatory risks warrant caution.
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Bulls vs Bears: DKNG Investment Factors
DraftKings presents a mixed investment case with strong revenue growth and improving profitability offset by significant stock decline and high leverage. The bull case is supported by analyst consensus and regulatory tailwinds, while the bear case highlights competitive and financial risks. Currently, the evidence slightly favors the bull side due to the substantial upside to analyst targets and the potential regulatory moat. The most critical tension is whether the company can sustain its growth while achieving profitability, as continued investment in prediction markets may delay margin expansion but could also create a new growth engine.
Bullish
- Robust Revenue Growth: DraftKings reported Q1 2026 revenue of $1.646 billion, a 16.8% year-over-year increase, demonstrating continued strong demand for its sports betting and iGaming products despite market maturation.
- Analyst Consensus Buy with 57% Upside: The average analyst target price is $34.84, implying a 57% upside from the current price of $22.17. With 35 analysts covering the stock and a consensus 'Buy' rating, institutional sentiment remains optimistic.
- Regulatory Moat from Senate Bill: A bipartisan Senate bill targeting prediction markets could create a protective regulatory moat for licensed U.S. sportsbooks like DraftKings, potentially limiting competition from unregulated entrants and boosting long-term profitability.
- Improving Profitability: The company achieved a net income of $21.07 million in Q1 2026, a significant turnaround from the net loss of $33.86 million in Q1 2025, indicating successful cost management and operational leverage.
Bearish
- Severe Stock Decline: The stock is down 51.1% over the past year, significantly underperforming the S&P 500's 21.5% gain. This sharp decline reflects investor concerns about competitive pressures and regulatory uncertainties.
- High Debt-to-Equity Ratio: With a debt-to-equity ratio of 3.06, DraftKings carries substantial leverage, which increases financial risk and interest expense, potentially constraining future investments and profitability.
- Decelerating Growth: While revenue growth remains positive at 16.8%, it is decelerating from the hyper-growth phase of 2021-2022, indicating market saturation and intensifying competition from rivals like FanDuel.
- Negative Operating Margin: The operating margin is -0.26%, reflecting ongoing heavy investments in marketing and new verticals like prediction markets, which pressure near-term profitability and could delay achieving sustainable margins.
DKNG Technical Analysis
DraftKings is in a pronounced downtrend, with the stock down 51.1% over the past year, significantly underperforming the S&P 500, which gained 21.5% over the same period. The current price of $22.17 sits near the lower end of its 52-week range, at approximately 45% of the range (calculated as (22.17 - 20.46) / (48.78 - 20.46) = 0.45), indicating that the stock is closer to its 52-week low of $20.46 than its high of $48.78. This positioning suggests that the market is pricing in significant pessimism, and the stock could be either a value opportunity or a falling knife, depending on whether the fundamental deterioration stabilizes.
Beta
1.63
1.63x market volatility
Max Drawdown
-57.0%
Largest decline past year
52-Week Range
$20-$49
Price range past year
Annual Return
-40.1%
Cumulative gain past year
| Period | DKNG Return | S&P 500 |
|---|---|---|
| 1m | +3.5% | +2.9% |
| 3m | +4.6% | +5.0% |
| 6m | +20.1% | +13.9% |
| 1y | -40.1% | +20.4% |
| ytd | -26.7% | +13.8% |
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DKNG Fundamental Analysis
DraftKings' revenue growth remains robust, with the most recent quarter (Q1 2026) reporting revenue of $1.646 billion, a 16.8% year-over-year increase. This growth is consistent with the prior year's trajectory, where Q1 2025 revenue was $1.409 billion, and Q2 2025 saw $1.513 billion, indicating a steady upward trend. The company's revenue diversification is evident, with sports betting contributing 63% of total sales, iGaming 30%, and fantasy/lottery 7%, though the recent launch of prediction markets is expected to be a new growth driver. The growth is driven by continued state expansions and increased customer engagement, but the pace is decelerating from the hyper-growth phase of 2021-2022, reflecting market maturation and competitive pressures.
Quarterly Revenue
$1.6B
2026-03
Revenue YoY Growth
+16.8%
YoY Comparison
Gross Margin
42.3%
Latest Quarter
Free Cash Flow
$678517000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is DKNG Overvalued?
Historically, DraftKings' PE ratio has been highly volatile, ranging from negative values during loss-making periods to a peak of 125 in Q1 2026. The current forward PE of 13.17 is near the lower end of its historical range, which typically saw PE ratios above 30 when the company was profitable. The PS ratio has declined from a high of 91.4 in Q3 2021 to the current 2.11, reflecting a massive de-rating as the market has become more skeptical about the company's ability to sustain high growth and achieve profitability. This suggests that the stock is trading at a significant discount to its own historical valuation, which could indicate a value opportunity if the company can execute on its growth plans, or a value trap if the market's pessimism is warranted.
PE
-3446.0x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 31x~125x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
43.2x
Enterprise Value Multiple
