Key Stats for DraftKings Stock
- Price change for DraftKings stock in last 6 months: -14%
- $DKNG Stock Price as of Oct. 5: $20
- 52-Week High: $37
- $DKNG Stock Price Target: $35
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What Happened?
DraftKings (DKNG) shares climbed 5% after Bank of America upgraded the stock from Neutral to Buy. Analyst Julie Hoover kept her $27 price target. That implies about 45% upside.
The stock is down 45% over the past year. Hoover calls that pullback an attractive entry point.
She says the worries that hurt the shares are now fading. Those worries included uncertainty over spending on prediction markets and a run of unfavorable NFL outcomes.
Prediction markets are a big part of the story. BofA says DraftKings is now the third-largest player in the space.
If regulators allow them to stay, BofA estimates they could bring in about $400 million in fees by 2027. Market making could add another $200 million to $400 million.
If regulators shut them down, Hoover says a long-term cloud over the stock would lift. That could support a higher valuation.
There is another good sign.
Fears that prediction markets would take business from sportsbooks have not come true. Since football season began, sportsbooks have grown faster than prediction markets.
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What the Market Is Telling Us About DraftKings Stock
Investors seem to see this as a reset, not a surprise. DraftKings stock had been under pressure. Now an analyst is saying the bad news is mostly priced in.
BofA did cut its 2026 EBITDA estimate from $625 million to $500 million. That came after the CEO said prediction market spending could be “meaningfully” higher than first planned.
BofA sees that honesty as a de-risking step. It also raised its 2027 EBITDA estimate from $1.05 billion to $1.15 billion.
The latest quarter helps the case. In Q2, DraftKings posted $115 million of adjusted EBITDA. Customer acquisition grew nearly 75%.
More than 600,000 customers have tried its Predictions product. Management said its core business is on track for about $1 billion in adjusted EBITDA this year.
It kept full-year revenue guidance at $6.5 billion to $6.9 billion.
There is one caution. BofA wants to see stronger cost discipline in the core business. That would help margins in 2028 and beyond.
Anyone following DraftKings stock will want to watch how regulators handle prediction markets. Investors who hold DraftKings stock should also track spending, since it could rise again.
Overall, DraftKings stock now has a clearer setup heading into 2027.
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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 stocks mentioned. Thank you for reading, and happy investing!