DraftKings Has Lost Half Its Value in a Year. Wall Street Still Sees $35.
Wall Street analysts are nearly unanimous that DraftKings is a buy, yet the stock just hit its lowest price since 2023 while a private rival with no sportsbook license is reportedly worth four times as much. Something in that math…
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DraftKings (NASDAQ:DKNG | DKNG Price Prediction) trades at $19.59, while the consensus analyst price target stands at $35.12. That gap implies upside of 79.28%. The market may be mispricing a durable franchise, or analysts may be slow to rebuild their models.
The stock dropped 7.42% in its latest session and set a new fifty-two-week low of $19.55. It was the lowest level since April 2023, leaving shares about 72% below their March 2025 peak.
Market value has fallen to $10.5 billion. Meanwhile, a private rival selling a cheaper version of the same product is reportedly worth several times as much.
Brazil Sparked the Selloff, but the Slide Began Months Earlier
FanDuel parent Flutter Entertainment (NYSE:FLUT) halted operations in Brazil. The halt came after the country’s online betting ban took effect on September 25, and the company then issued a profit warning. Its shares fell 15.99% over the past week to their lowest level in years.
DraftKings has no operations in Brazil, so its 10.14% weekly decline was a sympathy move. Penn Entertainment (NASDAQ:PENN) slipped 8.11% that week.
Brazil explains one week, however. DraftKings is down 22.45% over one month and 53.69% over one year.
Second-quarter revenue of $1.44 billion missed the $1.51 billion consensus. Sportsbook net revenue margin narrowed to 6.8% from 8.7%. Adjusted EPS of $0.09 missed the $0.1917 estimate.
Prediction Markets Undercut Sportsbooks on Price
Prediction markets let people trade contracts on event outcomes, including sports. Kalshi now dominates NFL trading volume and reportedly plans to raise $1 billion at a $40 billion valuation. The company has not confirmed this.
Kalshi has been valued at about four times DraftKings’ market value. An exchange matches two users and takes a fee. That makes it structurally cheaper than a sportsbook that sets odds and keeps a margin.
In a Citizens survey, 35% of respondents cited “lower prices as a reason for choosing prediction markets over sportsbooks.” DraftKings launched its own Predictions product and reports “no discernible impact” on sportsbook revenue.
But management acknowledges Predictions revenue per customer may initially trail the sportsbook’s. Winning that category could compress DraftKings’ own margins.
Why Analysts Still See Large Upside
Among analysts covering DraftKings, 5 rate the stock a strong buy, 24 a buy, 6 a hold and 1 a strong sell. Citizens cut its target to $35 from $37, still far above the price.
Analysts point to guidance. Management kept its guidance unchanged. Full-year revenue guidance of $6.5 billion to $6.9 billion and adjusted EBITDA guidance of $700 million to $900 million remain in place, and it says the core business is on track for about $1 billion in adjusted EBITDA.
The $35.12 consensus sits near the fifty-two-week high of $38.06, suggesting targets reflect older prices.
Four Conditions the Target Needs to Survive
Monthly unique payers rose about 9% to 3.6 million, but average revenue per payer fell about 13% to $132. Hold percentage must recover, and promotional spend cannot step up. Sales and marketing expense rose to $322.5 million from $233.2 million.
State regulation must stay closed to further exchange expansion, with sportsbooks licensed state by state, while exchanges operate under a federal derivatives framework. A House Oversight Committee investigation into insider trading on prediction markets could slow the competitor. The next handle-and-hold reports will test these conditions.
The risk/reward at current levels looks poor. The implied upside requires all four conditions to hold, and the exchange pricing model works against at least two. Sports consumer volume rose 15% to $13.14 billion, and the company bought back $154.2 million of stock in the first half. Insiders, however, have been net sellers across 72 recent transactions.
If you are near retirement, a single consumer discretionary stock facing a structural pricing threat is a poor fit. The S&P 500 rose 15.15% over the past year while DraftKings fell 53.69%. The stock would look more attractive if revenue per payer stabilizes without greater promotions.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
