Key Stats for DraftKings Stock
- Price Change for DKNG stock: 8%
- $DKNG Share Price as of Nov. 7: $30.40
- 52-Week High: $53.61
- $DKNG Stock Price Target: $49.65
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What Happened?
DraftKings (DKNG) stock rose more than 8% last Friday even as the sports betting giant slashed its full-year revenue guidance.
DraftKings now expects 2025 revenue between $5.9 billion and $6.1 billion, down from the previous range of $6.2 billion to $6.4 billion.
Adjusted EBITDA guidance was also cut nearly in half, from $800 million to $900 million, down to $450 million to $550 million.
Customer-friendly sports outcomes that hammered results in September and October. CEO Jason Robins stated that unfavorable outcomes have cost the company more than $300 million in revenue over the past two months, with just a handful of NFL games having a disproportionately significant impact.
This follows a strong second quarter, during which favorable outcomes added roughly $100 million to revenue.
Despite the guidance cut, Robins struck an optimistic tone, calling himself “the most bullish I’ve ever felt about the future of DraftKings.”
The underlying business metrics tell a different story from the short-term volatility. NFL handle grew 13% this season, while NBA handle surged 19%.
October handle accelerated to 17% year-over-year growth, and customer retention also improved, with NFL Week 1 customer retention up over 300 basis points compared to last year.
DraftKings announced it extended its Amazon partnership for five years and secured major new marketing deals with ESPN and NBCUniversal.
The company also revealed that it’s launching a prediction markets product in the coming months, following its acquisition of RailBird last month.
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What the Market Is Telling Us About DKNG Stock
The uptick in DKNG stock suggests investors are not too concerned about the volatility in sports betting outcomes and what that means for earnings predictability.
Additionally, the underlying business momentum remains strong. For instance, parlay betting continues to surge, with the parlay handle mix-up increasing by 800 basis points for the NFL and 1,000 basis points for the NBA season-to-date.
This is critical because parlays drive higher hold rates and better margins. The company’s sportsbook hold percentage has improved by over 400 basis points in the past four years, averaging more than 100 basis points per year.
The prediction markets opportunity adds another growth avenue for DKNG stock. Management plans to focus on the roughly 50% of U.S. states where online sports betting isn’t legal.
Robins emphasized that DraftKings will be “measured” in its investment, requiring shorter payback periods than traditional sports betting products.
The company believes that prediction markets are incremental rather than competitive with sports betting, pointing to international markets where prediction betting represents only a low to mid-single-digit market share.
Management also announced the board authorized doubling the share repurchase program from $1 billion to $2 billion. The company has repurchased 9.3 million shares since its inception and plans to remain active with buybacks in the coming quarter.
Looking ahead, DKNG stock faces near-term uncertainty due to sports outcome volatility, but its long-term growth trajectory appears intact.
The new media partnerships, the Spanish-language app launching ahead of the 2026 World Cup, and the entry into prediction markets all provide incremental growth opportunities.
The question for investors is whether the improved unit economics and market share gains can offset concerns about earnings volatility and increased competition from prediction platforms.
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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!
