DraftKings Stock Tumbles After Weak Revenue Forecast Rattles Investors

Key Stats for DraftKings Stock

• Price change for DraftKings stock: -14%
• $DKNG Share Price as of Feb. 16: $22
• 52-Week High: $54
• $DKNG Stock Price Target: $42

Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free)>>>

What Happened?

DraftKings (DKNG) stock is getting hammered today, falling roughly 17% after the company’s 2026 revenue outlook came in well below Wall Street’s expectations.

• The numbers themselves weren’t bad. In Q4 2025, DraftKings earned 25 cents per share on revenue of $1.99 billion.
• Both figures were at par with analyst estimates, and revenue was up nearly 43% from the same period a year ago.
• Full-year adjusted EBITDA more than tripled to $620 million, and the company reported positive net income for the first time in its history.

So why is DraftKings stock selling off so hard? It all comes down to the 2026 guidance. The company is forecasting revenue of $6.5 billion to $6.9 billion for the year.

That sounds like solid growth, but analysts had been expecting $7.31 billion. The midpoint of DraftKings’ own range falls about $600 million short of that consensus.

CEO Jason Robins addressed the gap directly on the earnings call, saying he deliberately pushed his team to guide conservatively after the company missed its own targets in 2025. “My team came in and showed me a number, and I said no, go make it lower,” Robins said.

The philosophy makes sense internally, but it spooked investors who had built bigger numbers into their models.

Part of the softer outlook reflects the company’s push into prediction markets, a new product category it views as a major long-term opportunity.

DraftKings is planning to spend heavily on customer acquisition there in 2026, but has included zero revenue from it in its official guidance.

That creates a gap between what the business might actually deliver and what the conservative official forecast shows.

See analysts’ growth forecasts and price targets for DraftKings stock (It’s free!) >>>

What the Market Is Telling Us About DraftKings Stock

Today’s drop in DraftKings stock is less about the Q4 results and more about the reset in expectations heading into 2026.

The core business is growing well. Sportsbook revenue was up 64% in Q4, parlay mix continues to climb, and the company now sits on $1.13 billion in cash.

But DraftKings stock had been priced for a bigger year ahead, and the guidance cut — however intentional — is forcing investors to recalibrate.

The prediction markets opportunity could eventually be a major upside driver, especially with the CFTC moving toward clearer regulations. None of that, however, is in the numbers yet.

For long-term investors, the key question is whether the conservative guidance reflects real caution about the business or simply a deliberate sandbagging strategy.

If it’s the latter, DraftKings stock could recover quickly as the year plays out.

Estimate a company’s fair value instantly (Free with TIKR) >>>

How Much Upside Does DraftKings Stock Have From Here?

With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.

All it takes is three simple inputs:

1. Revenue Growth
2.  Operating Margins
3.  Exit P/E Multiple

If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.

From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.

See a stock’s true value in under 60 seconds (Free with TIKR) >>>

Looking for New Opportunities?

• See what stocks billionaire investors are buying so you can follow the smart money.
• Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
• The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.

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 stocks mentioned. Thank you for reading, and happy investing!