Key Takeaways
- Needham cut its DraftKings price target to $30 from $35 on Nov. 2 and kept its Buy rating. The new target is 44% above the stock’s last close.
- DraftKings is down 42% from its January high because spending on prediction markets has cut into profit, and rivals like Kalshi have taken most of that market’s early volume.
- At $30, DraftKings would trade at 29x expected earnings for the next 12 months, so Needham is counting on analysts’ forecast that earnings will double in 2027.
- A year ago, analysts expected much more for 2027. That makes DraftKings’ first look at 2027 on its Nov. 6 call the thing to wait for before betting on a rebound.
DraftKings (DKNG) stock has lost 42% since its closing high on Jan. 5, and Needham just cut its price target for the second time this year. The firm’s new $30 target is still 44% above the stock’s $20.91 close on Oct. 30.
Predictions got expensive
The slide started in February, when DraftKings guided to 2026 revenue of $6.5 billion to $6.9 billion, below what analysts expected, and set aside $200 million to $300 million for Predictions, its new prediction-markets business.
In the second quarter, revenue fell 5% from a year earlier to $1.44 billion, and adjusted EBITDA dropped to $115 million from $301 million.
Rivals are keeping their lead, too: Needham’s own count had Kalshi taking 76% of sports prediction-market volume in the NFL’s opening week in September, against 3% for DraftKings’ exchange.
Needham hasn’t given up on Predictions
Analyst Bernie McTernan kept his Buy rating on Nov. 2 while cutting the target to $30 from $35. He had already cut it to $35 from $52 in February. In January, he told CNBC’s Power Lunch that prediction markets would be an asset for DraftKings.
TIKR tracks 36 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 $30 add up?
The 37 analysts covering DraftKings have cut their average target from $51 a year ago to $34:
They’ve also cut this year’s earnings estimate, to $0.85 of normalized EPS from $1.02 90 days ago. For 2027 and 2028, they expect $1.71 and $2.31:
The 2027 estimate has stayed around $1.70 for 90 days. But at the end of September 2025, analysts expected $2.71 for that year.
At $20.91, DraftKings trades at 20x expected earnings for the next 12 months, below its 22x average over the past year. At $30, it would trade at 29x, near the top of the 16x-31x range it has traded in at quarter-ends since March 2025. That 29x drops quickly as 2027 earnings move into the 12-month window, if analysts have the year right.
I’d wait for the 2027 outlook
Predictions could keep costing more than planned: Citizens’ Jordan Bender estimates DraftKings will spend $450 million to $500 million on it this year.
CEO Jason Robins thinks spending is headed the other way. Asked in September whether this year’s extra Predictions spending means more in 2027, he said, “I think if anything, it’s probably the opposite.”
Frankly, I’d want to see that in DraftKings’ 2027 outlook before betting on a rebound.
DraftKings reports third-quarter results after the close on Nov. 5, and management has promised a 2027 update on the Nov. 6 call. If that outlook keeps 2027 earnings near the Street’s estimate, $30 will look a lot more reasonable.
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!
