Key Takeaways
- Mizuho cut its DraftKings price target to $35 from $45 and kept its Outperform rating. The new target is 87% above Monday’s close, after a 48% fall from the stock’s January closing high.
- DraftKings raised its 2026 Predictions spending plan to $650 million to $700 million and cut its 2026 adjusted EBITDA guidance to $175 million to $275 million.
- At $35, DraftKings would trade at about 31x forward earnings, near the top of its range since early 2025, while analysts keep cutting their estimates.
- Mizuho’s target looks too high for the next year until DraftKings shows its 2027 guidance holding and its Predictions spending coming down.
DraftKings (DKNG) stock is down 48% from its January closing high. On Monday, Nov. 9, Mizuho cut its price target to $35 from $45. That’s still 87% above Monday’s $18.70 close.
Predictions got a lot more expensive
DraftKings launched Predictions in December 2025 to compete with prediction markets. Those markets sell sports contracts across the country, including in states where sports betting is illegal, and pay no state gaming taxes. Thursday’s third-quarter report showed what that’s costing. DraftKings raised its 2026 Predictions investment to $650 million to $700 million, from $200 million to $300 million, and cut its 2026 adjusted EBITDA guidance to $175 million to $275 million, from $700 million to $900 million. The stock tumbled 21.3% on Friday, Nov. 6.
Mizuho trims, but stays bullish
Mizuho analyst Ben Chaiken kept his Outperform rating, even as he called the post-earnings selloff understandable. The bull case rests on DraftKings’ own 2027 guidance: $800 million to $1 billion of adjusted EBITDA, with Predictions spending falling to $250 million to $350 million. CEO Jason Robins also wrote in the shareholder letter that “even if sports contracts were to end in July 2028, we estimate our 2026 cohort would be fully paid back before that date.”
Mizuho is out on a limb, though. More than a dozen other firms cut their targets after the report, and none of them went above $35. JPMorgan, UBS and Stifel downgraded the stock, with targets of $21 to $22.
TIKR tracks 37 analysts on DraftKings. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on DraftKings, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See DraftKings’ Analyst Ratings
Does $35 add up?
Analysts’ average target has fallen steadily over the past year:
It’s $31 now, down from $48 a year ago, and 37 analysts cover the stock. A $35 share price would be about 31x what analysts expect DraftKings to earn over the next 12 months. At Friday’s close, the stock traded at 16x. Over the past year, it averaged about 22x, and since March 2025 it has never closed a quarter above about 31x.
So Mizuho needs the top of that range again. Analysts still expect earnings to more than double from 2025’s $0.66 a share by 2027:
But they’ve been cutting since the report, and this year’s estimates have fallen the most.
Better to wait for February
Robins himself named the biggest risk on Friday’s call. His base-case forecast is a Supreme Court ruling on sports event contracts in mid-2028, and a loss there could shut down the sports side of Predictions. DraftKings’ own downside model assumes that once sports contracts end, a Predictions customer brings in just 20% of the gross profit it does today. In that case, customers signed in 2027 would take 41 months to pay back instead of 18. Mizuho is asking for too much, too soon. If the fourth-quarter report in February shows the 2027 guidance holding and Predictions spending coming down as planned, Mizuho will have a much easier time defending $35.
So what is DraftKings stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
