Track market-moving stories before they get noisy

The latest trading day saw DraftKings (DKNG) settling at $20.94, representing a +2% change from its previous close.

DraftKings Inc. (DKNG) NEXTPredict Summit NYC 2026 October 22, 2026 2:00 PM EDT

Company Participants

Jason Robins - Co-Founder, Chairman & CEO

Conference Call Participants

Chuck Todd
Contessa Brewer

Presentation

Chuck Todd

You've taken care of your biology breaks. We want to get started. We've got an exciting second half, and we're going to keep feeding in. We're going to keep imbibing you later. We'll have more on that in the -- as we go about here, but we've got a couple of incredible conversations, including the one we're about to have right now.

We're bringing back up my friend, Contessa Brewer of CNBC, and she's going to be in conversation with Jason Robins, CEO of DraftKings, and he's not paying me to say this, but hey, instead of the stage is yours, the crown is yours. So there.

Contessa Brewer

The crown is not really mine because the crown is over there. I already tried to steal that and he was like, no way, man. Stay away from me.

Jason Robins
Co-Founder, Chairman & CEO

Do you need me to open the water for you?

Contessa Brewer

Yes. Should we just do that now before I can't do it for myself.

Question-and-Answer Session

Contessa Brewer

So Jason, you get a lot of coverage from me and from CNBC for DraftKings and for sports betting and the business of sports betting in the way that investors make money or not. You get far less attention for your prediction platform because most of that spotlight goes to Kalshi and Polymarket until very recently. Like what is it for you that is switching the -- what's the catalyst for you now starting to get more attention for your prediction platform?

Jason Robins
Co-Founder, Chairman & CEO

I think the fact that

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BOSTON--(BUSINESS WIRE)--DraftKings Inc. (Nasdaq: DKNG) (“DraftKings” or the “Company”) today announced that Jason Robins, the Company’s Chief Executive Officer and Co-founder, will participate in a fireside chat at the NEXTPredict 2026 Summit on October 22, 2026, at 2:00 p.m. ET / 11:00 a.m. PT.

The session will be livestreamed on the NEXT.io YouTube channel and by Decrypt on X.

About DraftKings
DraftKings Inc. is a digital sports and gaming company created to be the Ultimate Host and fuel the competitive spirit of sports fans with platforms that range across daily fantasy, regulated gaming, prediction markets and digital media. Headquartered in Boston and launched in 2012 by Jason Robins, Matt Kalish and Paul Liberman, DraftKings is the only U.S.-based vertically integrated sports betting operator. DraftKings’ mission is to make life more exciting by responsibly creating the world’s favorite real-money games, betting experiences and event contracts trading. DraftKings Sportsbook is live with mobile and/or retail sports betting operations pursuant to regulations in 30 states, Washington, D.C., Puerto Rico, and Ontario, Canada. The Company operates iGaming pursuant to regulations in five states and in Ontario, Canada under its DraftKings brand and pursuant to regulations in four states and in Ontario, Canada, under its Golden Nugget Online Gaming brand. DraftKings also owns Jackpocket, the leading digital lottery courier app in the United States. DraftKings’ daily fantasy sports platform is available in 44 states, Washington, D.C., and certain Canadian provinces. DraftKings' wholly-owned subsidiary GUS III Inc. (d/b/a DraftKings Predictions) also operates DraftKings Predictions, offering federally regulated event contracts under CFTC oversight. DraftKings is both an official sports betting and daily fantasy partner of the NHL, PGA TOUR and WNBA, as well as an official daily fantasy partner of NASCAR, an official sports betting partner of the NBA and an authorized gaming operator of MLB. In addition, DraftKings owns and operates DraftKings Network, a multi-platform content ecosystem. DraftKings is committed to delivering responsible engagement tools and resources, while focusing on integrity and customer education.

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DraftKings (DKNG - Free Report) closed the most recent trading day at $19.31, moving +2.17% from the previous trading session. The stock outperformed the S&P 500, which registered a daily gain of 0.33%. On the other hand, the Dow registered a gain of 1.08%, and the technology-centric Nasdaq increased by 0.08%.

Prior to today's trading, shares of the company had lost 22.32% lagged the Consumer Discretionary sector's loss of 3.52% and the S&P 500's gain of 1.41%.

Investors will be eagerly watching for the performance of DraftKings in its upcoming earnings disclosure. The company is predicted to post an EPS of -$0.1, indicating a 61.54% growth compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $1.44 billion, indicating a 25.53% increase compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates project earnings of $0.9 per share and a revenue of $6.72 billion, demonstrating changes of +36.36% and +11%, respectively, from the preceding year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for DraftKings. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 19.05% decrease. Currently, DraftKings is carrying a Zacks Rank of #5 (Strong Sell).

Digging into valuation, DraftKings currently has a Forward P/E ratio of 21. This indicates a premium in contrast to its industry's Forward P/E of 14.81.

Meanwhile, DKNG's PEG ratio is currently 0.84. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DKNG's industry had an average PEG ratio of 1.05 as of yesterday's close.

The Gaming industry is part of the Consumer Discretionary sector. At present, this industry carries a Zacks Industry Rank of 156, placing it within the bottom 37% of over 250 industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

DNNG's shares plunge 22% in a month as rising investment costs, earnings estimate cuts and regulatory uncertainty raise questions about whether to buy the dip.

The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?

Let's take a look at what these Wall Street heavyweights have to say about DraftKings (DKNG - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.

DraftKings currently has an average brokerage recommendation (ABR) of 1.61, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 37 brokerage firms. An ABR of 1.61 approximates between Strong Buy and Buy.

Of the 37 recommendations that derive the current ABR, 26 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 70.3% and 8.1% of all recommendations.

Brokerage Recommendation Trends for DKNG

Check price target & stock forecast for DraftKings here>>>

The ABR suggests buying DraftKings, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.

Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.

This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.

Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.

Zacks Rank Should Not Be Confused With ABRIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.

The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.

Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.

In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.

In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.

There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.

Should You Invest in DKNG?Looking at the earnings estimate revisions for DraftKings, the Zacks Consensus Estimate for the current year has declined 19% over the past month to $0.9.

Analysts' growing pessimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates lower, could be a legitimate reason for the stock to plunge in the near term.

The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #5 (Strong Sell) for DraftKings. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Therefore, it could be wise to take the Buy-equivalent ABR for DraftKings with a grain of salt.

Dave Ramsey called two of America's biggest sportsbook companies out by name, and the financial case he made against them goes beyond morality into something every young investor should see in the earnings data.

Prediction markets have forced the gambling industry to take drastic action. While headlines often focus on Kalshi or PolyMarket users betting on politics or economics, more than 80% of activity still happens in sports markets, and that’s bad news for incumbent sportsbooks. Plus, prediction markets aren't just eating share; they also get preferential tax and legal treatment from the federal government, while traditional sports betting remains under the eye of state gambling commissions.

With the deck now stacked against them for a change, sportsbooks and casinos have been offering promotions to lure back wayward gamblers. And we aren’t just talking about the parlay boosts you see Kevin Hart hawking every Sunday. Gambling companies are spending millions of dollars on marketing and promotion, and as you might expect from a mature industry, the results are mixed. Flutter Entertainment PLC NYSE: FLUT, Las Vegas Sands Corp. NYSE: LVS, and Penn Entertainment Inc. NASDAQ: PENN each took a different approach to promotion, and their 2026 stock performance shows which strategy the market is rewarding.

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Flutter Entertainment: Defending Market Share at Any CostFlutter Entertainment is the parent company of FanDuel, one of the two largest online sportsbooks in the U.S., alongside DraftKings Inc. NASDAQ: DKNG.

Flutter Entertainment Today

FLUT

Flutter Entertainment

$79.76 -0.02 (-0.02%)

As of 10/9/2026 03:59 PM Eastern

This is a fair market value price provided by Massive. Learn more.

$73.50▼

$255.26$144.70

FanDuel is the segment under the most pressure from prediction markets, and new CEO Dan Taylor is deliberately reinvesting in the platform through marketing and its own prediction-market buildout. Some of these initiatives are showing up in the numbers, and the results so far haven’t been pretty.

The fiscal Q2 2026 report showed revenue grew just 3% year over year (YOY), and the company reported a net loss of $296 million in the period. A 61% YOY increase in sales and marketing spend ate into profits, and adjusted EBITDA fell 45% from Q2 2025. The World Cup spiked user activity, but management doesn’t see it as sustainable and again reduced guidance for 2026 revenue and EBITDA. CEO Taylor expects continued marketing efforts to create a $270 million EBITDA drag for the remainder of the fiscal year.

The World Cup happens once every four years, and this one-time boost goes away in Q3. The fiscal Q1 2026 report showed U.S. monthly players down 1%, and handle down 9%. The gambling ban in Brazil adds a $70 million revenue headwind, and the stock has hit new 2026 lows in recent weeks. The chart also flashes several bearish signals, including resistance at the 50-day moving average and a relative strength index (RSI) hovering between 30 and 50.

Las Vegas Sands: Retaining Share Without the Profit GainsLas Vegas Sands has focused on reinvestment in Macau over the last year, with mixed success.

Las Vegas Sands Today

LVS

Las Vegas Sands

$36.18 +0.01 (+0.03%)

As of 10/9/2026 03:59 PM Eastern

This is a fair market value price provided by Massive. Learn more.

$35.28▼

$70.453.32%

14.08

$60.16

Despite a top- and bottom-line miss in fiscal Q2 2026, Sands China's mass gross gaming revenue (GGR) grew 8% YOY (compared to 4% YOY for the overall market), and Marina Bay Sands in Singapore reported $689 million in EBITDA.

But management is working hard to retain clients, and it's getting increasingly expensive to keep them. Macau commissions and promotions topped 20% of GGR in Q2, the highest figure on record.

Q1 promotional spend was already up 28% YOY, and the company says this approach won’t change in the second half of fiscal 2026.

And while management does not provide guidance, it maintained its $700 million quarterly EBITDA target for Macau.

Despite LVS maintaining more share, the market hasn’t rewarded it. The stock is down more than 40% year-to-date (YTD), and the sell-off has intensified over the last month. A Death Cross created stiff resistance at the 50-day moving average, and now the MACD shows buying momentum has completely evaporated.

Penn Entertainment: Marketing Pullback Rewarded by the Market (Sort Of)Penn Entertainment is the best-performing stock of the three so far in 2026. Despite a recent 20% drawdown, PENN shares are still up about 5% YTD, and the story here is more about what the company didn’t do.

PENN Entertainment Today

PENN

PENN Entertainment

$15.48 0.00 (0.00%)

As of 10/9/2026 04:00 PM Eastern

$11.65▼

$22.36$24.00

Penn Entertainment exited its 10-year agreement with ESPN Bet in December 2025 and relaunched under its own moniker (theScore Bet). In the two months following the rebrand, interactive marketing spend dropped 65% while online sportsbook revenue doubled.

During the fiscal Q2 2026 conference call on Aug. 6, management raised its 2026 retail revenue guidance midpoint to $5.87 billion, citing expected margin growth in the second half of the year. In the online segment, adjusted EBITDA losses narrowed to $9.5 million from $62 million in Q2 2025. Handle is down 24%, but management says the customers leaving are promo-dependent, and it aims to attract more VIP-level clients. Most of Penn’s revenue still comes from its physical casinos. Still, the online losses have narrowed thanks to the marketing pullback, and the market currently sees that as a better value proposition than paying through the nose to retain clients.

PENN shares have dipped more than 20% in the last three months, and the drawdown has pushed the price below the 50-day and 200-day moving averages. The RSI bounced off an oversold signal in the first week of October but remains below the bullish 50 threshold.

While PENN has been a winner in the gambling sector, it still lags far behind the S&P 500, and its digital business continues to shrink.

Getting leaner has limited losses, but this sector still needs evidence of growth before any of these stocks start beating the market again. Penn’s Q3 2026 conference call on Nov. 5 is the next potential catalyst; if the digital base stabilizes, it could prove that pulling back on promotions is the best way to operate.

Should You Invest $1,000 in Flutter Entertainment Right Now?Before you consider Flutter Entertainment, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Flutter Entertainment wasn't on the list.

While Flutter Entertainment currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

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A Detroit mom discovered her fiancé had been secretly gambling online with money meant to pay off $20,000 in hidden debt, and a Ramsey Show host had a pointed message for him about borrowed money, a special needs child, and…

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“How dare you take borrowed money and go gambling with it when you have a special needs kid.” John Delony said that on The Ramsey Show to Grace, a Detroit mom who called in on an episode that aired October 5, 2026.

Grace has been engaged for four years and has two children. One child has a complex medical diagnosis. About three years ago, she found out her fiancé had piled up almost $20,000 of debt while he was off work. Then, six months ago, she learned he had been gambling online with the extra money that was supposed to pay down those debts.

They blocked him from every online gambling site with a one-year wait before deposits resume. Medical bills and broken trust have delayed the wedding. Delony called the pattern “financial infidelity“ and said that if Grace were his daughter or sister, “I would tell you to run from this guy.”

Six days before the call aired, BetMGM’s CEO told CNBC that the “resilience of sports business has been a surprise to me.” Part of that resilience is spending by households like Grace’s.

Borrowed Money Plus a House Cut Adds Up to Two Guaranteed Losses Delony is right. Gambling with borrowed money costs two things regardless of results: interest from the lender and the house’s cut.

Start with the house. Over time, a sportsbook holds roughly 5% to 8% of every dollar played. DraftKings (NASDAQ:DKNG | DKNG Price Prediction) runs one of the two biggest U.S. sportsbooks.

In the second quarter of 2026, its sportsbook net revenue margin was 6.8%, down from 8.7% a year earlier. That was a weak quarter for the company, with results going customers’ way and heavy promotion spending. The house still holds its cut.

That cut grows because winnings get played again. A $1,000 deposit cycled through ten times means $10,000 in total play. At a 6.8% margin, the house expects to holds $680.

Now say the $1,000 came off a credit card charging 22%. A year of interest adds the expected cost to $900 on $1,000 borrowed.

Apply that rate to the full $20,000 and the interest comes to $4,400 a year, or about $367 a month before any balance is paid off. For a family paying for a child’s complex medical care, that money could have covered copays and prescriptions.

Proof the Gambling Has Stopped Decides Whether This Debt Can Be Fixed One question decides whether this household can recover: has the gambling really stopped? Dave Ramsey put it bluntly on a June 2026 episode: “It’s coming back quickly if the gambling and the poor decisions haven’t come to a screeching halt.”

If it has stopped, $20,000 is a math problem with an end date. At 22%, paying $1,000 a month clears the balance in about 25 months with roughly $5,142 in total interest. The payments are painful and finite.

If the gambling continues, there is no end date. The site block runs out in a year, and every payment plan gets renewed with new debt. Marriage raises the stakes. The Consumer Financial Protection Bureau notes that in many states, both spouses are legally responsible for certain debts even if the debts are nominally in the name of only one spouse. A wedding before he shows he has stopped could put his risk on her credit report.

Ramsey’s standard for that proof is behavior: “You cannot trust a thing that’s being said. The only thing you can trust are the actual actions.”

DraftKings shares trade near $20, down about 43% from a year ago, even after a Bank of America upgrade lifted the stock today.

Five Moves to Make Before Merging Finances With a Gambler Pull every credit report. Sit down together at AnnualCreditReport.com. Write out each debt with its balance and interest rate, so the real total is on paper and can’t be hidden again. Take him off the household money. Ramsey’s guidance is that people coming off sports gambling don’t get to handle money for the next three to five years. Holds the bills, savings and medical funds in accounts only Grace controls. Price the habit. Get his deposit history from each sportsbook and add it up. Multiply his total play by a 7% house cut. That shows in dollars what the habit cost the family. Tie the wedding to the block running out. Make the decision only after the one-year lock ends with no new deposits, backed by bank statements. Get him into treatment. Gamblers Anonymous and a licensed counselor treat the behavior that makes the debt. A debt payoff plan only handles the balances that behavior already ran up. The site block gives Grace a clear checkpoint. If his deposit history stays empty until the lock ends, the payoff plan and the wedding can be back on the table.

Contact [email protected] for any questions or corrections.

DraftKings Inc. NASDAQ: DKNG is moving to capture the prediction market sector through its newly launched, CFTC-regulated DKeX exchange.

DraftKings Today

$19.09 -0.66 (-3.36%)

As of 01:23 PM Eastern

This is a fair market value price provided by Massive. Learn more.

$18.52▼

$36.98$33.95

As its primary rival, Kalshi, faces state-level litigation, DraftKings' pivot offers a remedy to the sports seasonality that has historically plagued its earnings. This transition opens a high-margin revenue vertical of about $800 million, and investors are accumulating the company's stock as it sits near 52-week lows.

The legacy sportsbook model is facing headwinds. Recent data shows an approximate 4.6% year-over-year revenue contraction to around $1.44 billion, signaling that the core betting business requires a catalyst.

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Sports betting relies heavily on seasonal events like the NFL schedule, leaving revenue gaps during summer months. By pivoting to event-driven contracts, DraftKings creates a year-round engagement engine. Investors evaluating DKNG's current price of around $19 are weighing near-term margin compression against the long-term cash flow potential of a regulated exchange.

Raising the Stakes: DKeX and the $800 Million VectorBank of America recently upgraded DraftKings from Neutral to Buy and maintained a $27 price target. This localized upward price action stems from the improving risk-reward profile created by the prediction market rollout. Bank of America's financial modeling indicates that the proprietary DKeX exchange could generate an estimated $600 million to $800 million in revenue by 2027. This includes roughly $400 million in direct transaction fees and up to $400 million in internal market-making operations.

Understanding the economics requires looking at the underlying infrastructure. DraftKings launched DKeX in June 2026, powered by its previous acquisition of Railbird Technologies. Owning the exchange software outright reduces external vendor costs and lets DraftKings capture the full margin on transactions. Instead of merely taking a small cut of a traditional sports wager, DraftKings now also operates as an event-contract exchange.

Event contracts function as binary options, where users buy a "yes" or "no" share on a specific outcome. Because the exchange simply matches buyers and sellers, the house takes no directional risk. DraftKings collects a transaction fee on every trade. Combined with internal market-making operations that provide liquidity, the platform captures margin on both the spread and the transaction fee.

Sanford C. Bernstein estimates DKeX will hit about $1 billion in consumer trading volume by December 2026. This projection provides a near-term metric for tracking the pivot's success relative to the recent decline in sportsbook revenue. The prediction market model provides year-round event trading that smooths out the volatile seasonal revenue curves associated with traditional sports betting.

Boxing Out the CompetitionThe competitive landscape presents some immediate challenges to DraftKings' operations. Fanatics is currently deploying an estimated $1 billion marketing budget for its betting operations. This escalation in advertising spending drives up customer acquisition costs across the sector, threatening traditional sportsbooks. DraftKings is utilizing the prediction market as an alternative, lower-cost acquisition channel.

Political events, economic data releases, and pop-culture outcomes attract a different demographic from traditional sports bettors. By cross-selling these new users into the core casino and sportsbook applications, DraftKings can lower its overall blended customer acquisition cost and improve total user lifetime value. This creates a more sustainable growth trajectory without engaging in a costly advertising war.

Private competitor Kalshi is reportedly seeking a $40 billion valuation and captured early NFL Week One prediction market share. Kalshi faces severe regulatory friction on its path to public markets. The private exchange is currently embroiled in aggressive litigation with multiple state attorneys general, including a recent high-profile lawsuit from New York.

This legal battle creates a structural advantage for DraftKings. The company already operates within an established state-by-state compliance framework and holds the necessary Commodity Futures Trading Commission approvals. While Kalshi dedicates capital to appellate courts and state regulators, DraftKings is deploying its cash toward user acquisition and platform liquidity. Regulatory compliance serves as a distinct operational moat, allowing DraftKings to capture retail market share in the prediction vertical without fighting new legal battles.

Hedging the Bet: DraftKings' Balance SheetInternal and external conviction are currently diverging, creating an interesting setup for value-oriented investors. Company insiders, including Director Jocelyn Moore, who liquidated roughly 10,700 shares in August 2026, have reduced their positions during the recent downward trend. Executive sales often signal near-term caution, but institutional sentiment provides a clear counterweight.

85th Percentile

Moderate Buy

77.8% Upside

Bearish

N/A

0.30 Selling Shares

202.50%

See Full Analysis

Entities like QRG Capital Management and NewEdge Advisors accumulated shares during the second quarter, treating the drop near the 52-week low of $18.52 as a strategic entry point. DraftKings' stock currently trades around $19 with a market capitalization of about $9.7 billion. Sell-side analysts maintain a Moderate Buy consensus, supported by an average 12-month price target of $34.04.

The fundamentals reveal a business in transition, navigating a complex macroeconomic environment. DraftKings carries a forward price-to-earnings ratio of about 48 and a heavily leveraged debt-to-equity ratio of 3.22. In a higher-interest-rate environment, carrying $3.22 in debt for every dollar of equity restricts financial flexibility. This leverage limits capacity to sustain a prolonged capital war against well-funded private rivals. Servicing this debt requires consistent cash flow, making DKeX's success vital for the company's future growth.

DraftKings recently beat net income, posting 9 cents in earnings per share versus a consensus estimate of 2 cents. This profitability pivot shows the company can optimize operations and cut unnecessary overhead while actively funding the DKeX expansion. With a beta of around 1.6, the stock is more volatile than the broader market. The stock is down about 44% year-to-date, reflecting market skepticism about the top-line contraction. However, recent institutional accumulation suggests professional money managers are focusing on 2027 cash flow projections rather than trailing 30-day performance.

The Final Hand: Evaluating the Event Exchange PivotDraftKings is fundamentally altering its core business model. The shift from a seasonal sports-beta play to a holistic, real-time event exchange provides a clear path to high-margin revenue generation. Monetizing election cycles and geopolitical events reduces reliance on the traditional sports calendar and creates a stickier, more engaged user base.

This transition will require careful execution. The heavy debt load and the recent contraction in core sportsbook revenue mean the DKeX platform must perform exactly as management models project. The $800 million projected revenue vector offers a compelling offset to rising customer acquisition costs, provided DraftKings maintains its regulatory advantage over private challengers. Investors evaluating consumer discretionary stocks might monitor DraftKings' monthly DKeX trading volumes heading into the winter months to gauge the success of the company's high-margin pivot before taking a position.

Should You Invest $1,000 in DraftKings Right Now?Before you consider DraftKings, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and DraftKings wasn't on the list.

While DraftKings currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

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The proliferation of prediction markets is throttling growth at DraftKings (DKNG +0.77%).

*Stock prices used were the afternoon prices of Oct. 4, 2026. The video was published on Oct. 6, 2026.

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

DraftKings (DKNG - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.

Over the past month, shares of this company have returned -18.4%, compared to the Zacks S&P 500 composite's +0.8% change. During this period, the Zacks Gaming industry, which DraftKings falls in, has lost 9.8%. The key question now is: What could be the stock's future direction?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, DraftKings is expected to post a loss of $0.10 per share, indicating a change of +61.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -10.6% over the last 30 days.

The consensus earnings estimate of $0.9 for the current fiscal year indicates a year-over-year change of +36.4%. This estimate has changed -19.1% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $1.75 indicates a change of +94.4% from what DraftKings is expected to report a year ago. Over the past month, the estimate has remained unchanged.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, DraftKings is rated Zacks Rank #4 (Sell).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

For DraftKings, the consensus sales estimate for the current quarter of $1.44 billion indicates a year-over-year change of +25.5%. For the current and next fiscal years, $6.72 billion and $7.72 billion estimates indicate +11% and +14.9% changes, respectively.

Last Reported Results and Surprise HistoryDraftKings reported revenues of $1.44 billion in the last reported quarter, representing a year-over-year change of -4.6%. EPS of $0.09 for the same period compares with $0.38 a year ago.

Compared to the Zacks Consensus Estimate of $1.5 billion, the reported revenues represent a surprise of -3.84%. The EPS surprise was -59.09%.

Over the last four quarters, DraftKings surpassed consensus EPS estimates times. The company topped consensus revenue estimates just once over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

DraftKings is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about DraftKings. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.

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Bank of America said it sees an opportunity for investors in DraftKings stock after an extended slump.

Bank of America spent a year on the sidelines watching DraftKings get hammered by prediction-market rivals, and now it has reversed course with a bold call that sent shares surging while Flutter and MGM barely moved.

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

A Wall Street firm that spent the past year avoiding DraftKings (NASDAQ:DKNG | DKNG Price Prediction) over prediction-market risk has lifted its view. DraftKings stock is up 5% to $19.46 in morning trading after Bank of America (NYSE:BAC) upgraded the shares to Buy from Neutral.

Also, shares of Flutter Entertainment (NYSE:FLUT) are up 1%, a far smaller gain for the parent of FanDuel, the largest U.S. sportsbook. MGM Resorts (NYSE:MGM) stock is down 0.6%, which points to relief concentrated in DraftKings.

The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is practically unchanged, so the broad market offers no explanation for the move. The Roundhill Sports Betting & iGaming ETF (NYSEARCA:BETZ) is a sector fund covering this group, with DraftKings and Flutter both among its largest holdings; this fund is up 3% to $16.73.

Bank of America Flips on Prediction-Market Risk Analyst Shaun Kelley of Bank of America upgraded DraftKings stock to Buy from Neutral and kept the firm’s price target on the shares at $27. Kelley wrote that Bank of America had stayed on the sidelines for the past year because of a difficult event path from prediction markets and material risk to estimates.

Bank of America now reads prediction markets as a win-win outcome for DraftKings, sees reduced cannibalization risk, and believes analyst estimates are bottoming. That view extends to DraftKings stock itself, which the firm described as offering a favorable risk-reward setup at its current valuation.

Kalshi and Polymarket Weighed on DraftKings Competition from Kalshi and Polymarket hammered DraftKings shares. These privately held platforms let users trade contracts on event outcomes including sports results, and they drove the stock sharply lower ahead of the upgrade. Uncertainty over how those platforms may be regulated added to the pressure, and DraftKings stock is down 44% year to date.

To compete, DraftKings runs its own prediction-market exchange and has indicated that it will keep spending on that product. On the August 7 earnings call, DraftKings management reported that more than 600,000 customers had engaged with the predictions offering year to date. On the same call, management said the company’s data showed “no discernible impact from prediction markets on our sportsbook revenue.”

Weak Q2 2026 results from DraftKings show why analyst estimates had been falling. DraftKings reported revenue of $1.44 billion, missing expectations, along with adjusted earnings of $0.09 per share that came in below forecasts. The company maintained its full-year revenue guidance of $6.5 billion to $6.9 billion, a steady outlook that supports Bank of America’s case that estimates are bottoming.

Flutter and MGM Trail the Rally Shares of Flutter are only slightly higher, even though the company owns FanDuel, the top U.S. sportsbook and the most direct rival to DraftKings, while MGM stock is in the red, despite the company’s BetMGM joint venture competing in the same sportsbook and online gaming markets. That pattern frames Bank of America’s call as a reset of expectations specific to DraftKings.

However, the bear case holds that an upgrade changes a rating while leaving the competitive field intact, as Kalshi and Polymarket are still taking event-contract volume that DraftKings has to spend to win back, and that outlay can weigh on the company’s margins.

What to Watch Next A single upgrade after a decline this deep is a sentiment event for DraftKings, and the open question is whether estimates have truly bottomed or merely stopped falling.

DraftKings CEO Jason Robins stated in the company’s Q2 release that “we can win the category this NFL season and beyond,” referring to predictions. The question now is whether NFL-season demand and predictions growth deliver on that confidence.

Contact [email protected] for any questions or corrections.

Key Takeaways DraftKings plans to move more Predictions volume to DKeX, retaining fees paid to external providers.DKeX complements in-house brokerage and market-making, with operations live on three exchanges.Predictions may deliver lower revenue per customer but comparable gross profit due to higher margins. DraftKings Inc. (DKNG - Free Report) plans to move more Predictions trading volume onto its DKeX exchange to retain fees that would otherwise accrue to external providers. Launched in June 2026, DKeX complements the company’s in-house brokerage and market-making operations.

DraftKings obtained Futures Commission Merchant approval in July, further advancing its integration strategy. The approach builds on its Sportsbook experience, where approximately 95% of sports content is priced and traded in-house.

Greater control over the platform could also support proprietary content, stronger retention and improved customer lifetime value. During its second-quarter 2026 earnings call, DraftKings reported that its market-making operation was live on three exchanges, with profitable activity on both singles and combos.

As DKeX grows, the company expects additional market-making opportunities and deeper liquidity to strengthen its offering. Although Predictions is expected to generate lower revenue per customer than Sportsbook, its higher-margin profile could support comparable gross profit per customer over time.

DKeX’s rollout could support higher profit per customer into 2027 as DraftKings brings more trading activity in-house. The extent of that improvement will likely depend on the pace of migration and the platform’s ultimate monetization potential.

DKNG’s Price Performance, Valuation & EstimatesDraftKings’ shares have declined 26.6% in the past three months compared with the industry’s 21.7% fall. In the same time frame, other industry players like Accel Entertainment, Inc. (ACEL - Free Report) , Boyd Gaming Corporation (BYD - Free Report) and PENN Entertainment, Inc. (PENN - Free Report) have fallen 16.5%, 24.2% and 33.4%, respectively.

DKNG Three-Month Price Performance
Image Source: Zacks Investment Research

DKNG stock is currently trading at a discount. It is currently trading at a forward 12-month price-to-sales (P/S) multiple of 1.26, below the industry average of 1.53. Conversely, industry players, such as Accel Entertainment, PENN Entertainment and Boyd Gaming, have P/S ratios of 0.62, 0.26 and 1.16, respectively.

DKNG’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for DraftKings’ 2026 earnings per share has declined in the past 60 days.

EPS Trend of DKNG Stock
Image Source: Zacks Investment Research

The company is likely to report solid earnings, with projections indicating a 36.4% surge in 2026. Conversely, industry players like Accel Entertainment and PENN Entertainment are likely to witness a rise of 15% and 117.5%, respectively, year over year in 2026 earnings. Meanwhile, Boyd Gaming’s 2026 earnings are expected to decline 3.1% year over year.

DKNG currently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

When a sports bettor clicks "place bet" on a phone, they aren't just engaging in a game of chance; they're feeding a massive, data-driven machine that has effectively commoditized the adrenaline of the stadium. DraftKings (DKNG -3.01%), a Boston-based digital enterprise, sits at the heart of this transition, offering sports betting, prediction contracts, iGaming, and fantasy sports services across much of the United States. With a share price of $21.16 as of Sept. 29, 2026, the company has seen its stock decline nearly 50% over the past year, reflecting the market's skittishness toward the gaming industry's path to lasting profitability.

Our proprietary Hidden Gems scoring system assigns DraftKings an overall Superscore of 73 out of 100, placing it in the Above Average category. The Superscore is an artificial intelligence (AI)-powered score that evaluates a company's overall strength by combining financial performance, product market position, technological capabilities, leadership quality, and relative valuation. It represents the unification of all our scores into a single score for public companies, with five rating bands: Exceptional (90-100), Strong (75-89), Above Average (60-74), Average (40-59), and Cautious (0-39). A 73 places the company in the Top 28% of all companies scored. This score serves as a quantitative starting point, but the tension between the company's operational growth and its inherent risks warrants closer scrutiny.

Why DKNG has a 73 SuperscoreRevenue scale: The company achieved $6 billion in revenue during 2025, a 27% increase that proves the business model can scale rapidly across newly legalized jurisdictions.Operational inflection: After years of heavy spending, the company reached positive net income of $3.7 million in 2025, marking a successful pivot from growth-at-all-costs to sustainable operations.Tech integration: Owning the stack, from account management to prediction engines, allows it to iterate on products faster and capture more value per user than rivals relying on third-party software.Efficient scaling: Asset turnover is 1.4x, demonstrating that management has successfully optimized its infrastructure and is now generating more revenue from every dollar invested in the platform.Market footprint: Its mobile sports betting services are now live in 27 states, covering over half the U.S. population and creating a significant hurdle for smaller competitors to overcome.Why is DKNG's Superscore not higher?Stretched valuation: The stock trades at an EV/EBITDA of 93.1x, a figure that leaves virtually no margin for error if regulatory changes or market saturation cool the company's growth.Regulatory headwinds: Ongoing scrutiny regarding the societal impact of sports betting and potential new tax or advertising restrictions create a persistent, unpredictable risk for the business.Customer acquisition costs: The company still spends heavily on promotions to keep its 3.6 million monthly payers engaged, and any decline in the effectiveness of this spend could quickly erode recent margin gains.Competitive intensity: The industry duopoly with FanDuel remains tight, and the constant need to defend market share keeps marketing budgets elevated and suppresses long-term operating margins.Hidden Gems database scores at a glanceScoreScore (out of 100)RankSupporting Data PointProduct82Top ~16%The company transitioned to sustainable profitability in 2025 while launching new vertical integration features like DKeX.Financial83Top ~9%Positive net income of $3.7 million in 2025 confirms a successful pivot from high-growth cash burn to operational maturity.Leaders53Bottom ~22%Governance risks are elevated due to high executive compensation costs and extreme voting power concentration.Tech83Top ~16%Proprietary technology stacks drive product velocity and allow for precise optimization of promotional spending.Valuation Risk57Bottom ~49%An EV/EBITDA of 93.1x prices in aggressive future growth, creating significant downside risk if guidance misses.Is DKNG right for your portfolio?This stock warrants a closer look if...

You are seeking growth within the consumer discretionary stocks sector and are comfortable with the inherent volatility of the online gaming market.You believe that the company's vertically integrated technology stack will continue to provide a cost advantage that smaller, less-scaled competitors can't match.You may want to keep researching before buying if...

You are uncomfortable with the current high valuation multiples, which demand perfect execution to justify the stock price.You worry that increasing regulatory scrutiny and potential legislative changes to betting laws could disrupt the company's long-term growth trajectory.The Superscore provides a data-driven signal to help organize your research. Still, it is not a replacement for your own due diligence on the company's strategy, industry risks, and personal financial goals.

My 5-year prediction for DKNG stockThe prediction markets are turning into big business, as the combined monthly global trading volume for the platforms Kalshi and Polymarket skyrocketed from $5 billion in September 2025 to $24 billion in April 2026. Naturally, more companies want to enter the space, with even the financial platform Robinhood Markets offering sports-related and prediction contracts. But while the space will become increasingly competitive, prediction markets also present an opportunity for DraftKings.

Premium Feature

Moneyball Superscore

68/100

Today's Change

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-3.01

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One of its advantages is that it has 3.6 million monthly active users and strong name recognition, having launched its fantasy sports platform in 2012. It already has a built-in user base receptive to prediction markets, thanks to its fantasy sports users, making it easier to cross-sell those newer endeavors.

In addition, as prediction markets face pushback from state regulators, DraftKings is all too familiar with navigating regulatory concerns. In 2015, for instance, DraftKings received a cease-and-desist order from the state of New York, as its fantasy sports operations were deemed illegal. That gives it experience working with regulators and finding a resolution.

That said, future regulatory risks are real concerns, as they could weigh down DraftKings’ revenue growth prospects. That's part of the risk of investing in the company, which any potential investor will need to be comfortable taking on.

For the next quarter, analysts are expecting sales growth of 9.8%, and for 2027, 13.3%. If DraftKings can keep growing revenue, profitability, and avoid regulatory setbacks, over the next five years, it could be a company that outperforms the broader markets.

The Hidden Gems Superscore reflects The Motley Fool's proprietary AI-driven evaluation of a company across product, financial, leadership, and valuation pillars as of the article date and may change over time. Performance figures are point-in-time. Past performance does not guarantee future results.

In the latest close session, DraftKings (DKNG - Free Report) was down 7.42% at $19.59. This change lagged the S&P 500's 0.17% loss on the day. On the other hand, the Dow registered a loss of 0.26%, and the technology-centric Nasdaq decreased by 0.09%.

The company's stock has dropped by 12.89% in the past month, falling short of the Consumer Discretionary sector's loss of 8.3% and the S&P 500's loss of 0.24%.

The investment community will be paying close attention to the earnings performance of DraftKings in its upcoming release. On that day, DraftKings is projected to report earnings of -$0.1 per share, which would represent year-over-year growth of 61.54%. Simultaneously, our latest consensus estimate expects the revenue to be $1.44 billion, showing a 25.53% escalation compared to the year-ago quarter.

For the full year, the Zacks Consensus Estimates project earnings of $0.9 per share and a revenue of $6.72 billion, demonstrating changes of +36.36% and +11%, respectively, from the preceding year.

It's also important for investors to be aware of any recent modifications to analyst estimates for DraftKings. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 22.73% fall in the Zacks Consensus EPS estimate. Currently, DraftKings is carrying a Zacks Rank of #4 (Sell).

In the context of valuation, DraftKings is at present trading with a Forward P/E ratio of 23.51. Its industry sports an average Forward P/E of 15.25, so one might conclude that DraftKings is trading at a premium comparatively.

We can also see that DKNG currently has a PEG ratio of 0.94. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Gaming industry stood at 1.05 at the close of the market yesterday.

The Gaming industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 174, which puts it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

TORONTO--(BUSINESS WIRE)--DraftKings Inc. (Nasdaq: DKNG) today announced an agreement with Prime Video that will make DraftKings the exclusive Sportsbook and Online Casino Integration sponsor of NHL on Prime. This includes integrations on Wednesday Night Hockey throughout the 2026-27 NHL season, plus select Stanley Cup playoff coverage on Prime Video. “Canada remains an important part of DraftKings' continued growth, and this exclusive deal with Prime Video creates an exciting new way to connec.

DraftKings (DKNG - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Shares of this company have returned -12.2% over the past month versus the Zacks S&P 500 composite's +0.7% change. The Zacks Gaming industry, to which DraftKings belongs, has lost 8.5% over this period. Now the key question is: Where could the stock be headed in the near term?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.

For the current quarter, DraftKings is expected to post a loss of $0.09 per share, indicating a change of +65.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +2.2% over the last 30 days.

The consensus earnings estimate of $0.99 for the current fiscal year indicates a year-over-year change of +50%. This estimate has changed -4.6% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $1.75 indicates a change of +76.7% from what DraftKings is expected to report a year ago. Over the past month, the estimate has changed -1.7%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, DraftKings is rated Zacks Rank #3 (Hold).

Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

In the case of DraftKings, the consensus sales estimate of $1.44 billion for the current quarter points to a year-over-year change of +25.5%. The $6.73 billion and $7.76 billion estimates for the current and next fiscal years indicate changes of +11.1% and +15.3%, respectively.

Last Reported Results and Surprise HistoryDraftKings reported revenues of $1.44 billion in the last reported quarter, representing a year-over-year change of -4.6%. EPS of $0.09 for the same period compares with $0.38 a year ago.

Compared to the Zacks Consensus Estimate of $1.5 billion, the reported revenues represent a surprise of -3.84%. The EPS surprise was -59.09%.

Over the last four quarters, DraftKings surpassed consensus EPS estimates times. The company topped consensus revenue estimates just once over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.

The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

DraftKings is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about DraftKings. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

DraftKings Inc. NASDAQ: DKNG shares fell 7.6% on Sept. 17 after data from the first week of the National Football League season was released.

DKNG's prediction platform drives unique customer growth (+10.4% YoY) and higher-margin prospects, with volumes surging from $2.3B to $11B in three months. Super App ambitions and aggressive customer acquisition have led to mixed near-term EBITDA, but position DKNG for sequentially stronger H2'26 performance. Despite balance sheet deterioration amid share repurchases, DKNG trades at a discounted EV/Sales of 1.75x, making its double-digit growth prospects attractive.

DraftKings Inc. (DKNG) Wells Fargo 9th Annual Consumer Conference September 22, 2026 11:30 AM EDT

Company Participants

Jason Robins - Co-Founder, Chairman & CEO

Conference Call Participants

Raymond Bowers - Wells Fargo Securities, LLC, Research Division

Presentation

Raymond Bowers
Wells Fargo Securities, LLC, Research Division

I'm Trey Bowers, the gaming, lodging, leisure analyst here at Wells Fargo, and it's my pleasure to welcome remotely, Jason Robins, CEO and Chairman, Co-Founder of DraftKings. Thank you so much for your time today.

Question-and-Answer Session

Raymond Bowers
Wells Fargo Securities, LLC, Research Division

So we'll just go ahead and kick it off. I think top of mind for a lot of investors these days, Jason, is prediction markets. And maybe you just want to kick off with kind of an update 1.5 quarters into the market, what you're seeing, and any learnings you've made in this first, what do we have, 5 months?

Jason Robins
Co-Founder, Chairman & CEO

Yes. So it's been only a couple of weeks of NFL. So obviously, still early, but we really are seeing just phenomenal trends, not just with Predictions, but also in the core business. Actually, maybe I'll start for a moment on the core. Everybody was concerned about handle growth. We have seen enormous handle growth to start the season, 15% so far month-to-date and really just great engagement from customers there. This is on the Sportsbook side, obviously.

IGaming, we've started to regain some share, seeing growth accelerate there as well. So really, really healthy trends in the core business. That business is on track to deliver what we had previously communicated, which is about $1 billion in adjusted EBITDA in 2026 and should increase pretty materially in 2027. So really excited about that. We'll have an update more on what 2027 looks like in our November earnings call.

Key Takeaways DraftKings has brought Predictions brokerage, exchange and market-making capabilities in-house.More DKeX volume could let DraftKings retain additional exchange fees and strengthen unit economics.DraftKings expects Predictions investment of $200M-$300M in 2026 as it builds the platform. DraftKings Inc. (DKNG - Free Report) is advancing its vertical integration strategy in Predictions as it works toward a long-term companywide adjusted EBITDA margin target of at least 30%. The strategy centers on bringing key platform capabilities in-house to increase profit generated per customer and strengthen control over product development.

DraftKings launched its DKeX exchange in June 2026 and obtained Futures Commission Merchant approval in July. The company now operates the brokerage, exchange and market-making components of Predictions internally. This structure allows DraftKings to capture more of the economics across the Predictions platform while supporting broader content offerings and improvements to the customer experience.

The approach builds on DraftKings’ experience in Sportsbook, where approximately 95% of sports content is priced and traded in-house. Internal capabilities have enabled the company to retain more value and develop differentiated products. DraftKings expects to apply the same approach to Predictions, using greater product control to improve retention and monetization over time.

The monetization profile could improve further as DraftKings routes more volume through DKeX and retains more exchange fees. The company expects this transition to support unit economics through 2026 and into 2027. Although Predictions is expected to generate lower revenue per customer than Sportsbook, its higher-margin profile could support comparable gross profit per customer over time. Near-term spending remains significant, with $200 million to $300 million of Predictions investment expected in 2026.

DraftKings’ expanding in-house capabilities and established Sportsbook experience could support progress toward its long-term companywide adjusted EBITDA margin target of at least 30%. However, continued investment needs and regulatory uncertainty could influence the pace of improvement. With the company expecting stronger unit economics as more volume moves through DKeX, customer monetization and spending discipline will likely remain key considerations in translating the benefits into margin improvement.

DKNG’s Price Performance, Valuation & EstimatesDraftKings’ shares have declined 12.6% in the past three months compared with the industry’s 9.7% fall. In the same time frame, other industry players like Accel Entertainment, Inc. (ACEL - Free Report) , Boyd Gaming Corporation (BYD - Free Report) and PENN Entertainment, Inc. (PENN - Free Report) have declined 14.7%, 16% and 21.3%, respectively.

DKNG Three-Month Price Performance
Image Source: Zacks Investment Research

DKNG stock is currently trading at a discount. It is currently trading at a forward 12-month price-to-sales (P/S) multiple of 1.46, below the industry average of 1.79. Conversely, industry players, such as Accel Entertainment, PENN Entertainment and Boyd Gaming, have P/S ratios of 0.64, 0.28 and 1.26, respectively.

DKNG’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research

The Zacks Consensus Estimate for DraftKings’ 2026 earnings per share has declined in the past 60 days.

EPS Trend of DKNG Stock
Image Source: Zacks Investment Research

The company is likely to report solid earnings, with projections indicating a 50% surge in 2026. Conversely, industry players like Accel Entertainment and PENN Entertainment are likely to witness a rise of 15% and 117.5%, respectively, year over year in 2026 earnings. Meanwhile, BYD’s 2026 earnings are expected to decline 3.1% year over year.

DKNG stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.