New York, Jan 31, 2026, 05:42 EST — Market closed
- Shares of DraftKings dropped Friday, tumbling on heavy volume after fresh price-target cuts.
- Expect the latest figures on betting volumes and spending to drop around mid-February.
Shares of DraftKings Inc dropped 8.1% on Friday, closing at $27.51 for a second day in the red. Volume surged well above the norm.
The drop is significant since sports-betting stocks have leaned on stable margins and predictable growth going into the key winter sports season. No company news is needed to jolt sentiment—such a sharp move can reshape forecasts before earnings, particularly as investors remain cautious about promotion costs and payout volatility.
With U.S. markets shut for the weekend, all focus now turns to Monday—will the sell-off press on? Traders are bracing for DraftKings’ upcoming update. The company is set to report fourth-quarter results after the close on Feb. 12, followed by a conference call the next day. An investor day, held virtually, is scheduled for March 2.
Stifel cut its price target for DraftKings to $44 from $46 but kept its buy rating intact, FactSet data shows, pointing to familiar hurdles: fierce competition and persistent struggles with profitability in online betting. Shares of Flutter Entertainment, the parent company of DraftKings’ main U.S. competitor FanDuel, also dipped that day.
Guggenheim cut its price target for DraftKings to $42 from $45 but maintained a buy rating, according to a note released late this week.
Some investors are focusing on weekly wagering patterns in key states like New York, where changes in “hold” — the share of bets a sportsbook retains after paying out winners — can trigger sharp revenue swings. JPMorgan analyst Daniel Politzer called the recent figures “very unfavorable” and warned they won’t alleviate worries about handle growth. (Handle means the total amount wagered.) Investing.com
“Prediction markets,” where users trade contracts linked to specific events, are raising alarms among regulators and state gaming authorities. Morgan Stanley analysts, speaking to Reuters Breakingviews, estimate DraftKings could face an EBITDA loss around $145 million in markets where it operates if these platforms catch on. The report also notes that legal challenges could slow this shift. Reuters
DraftKings is still trying to prove it can grow without leaning so much on discounts. In sports betting, a run of bad game outcomes can drag margins down for a quarter, even when handle looks strong, which makes the numbers harder to read from the outside.
The risk scenario is clear-cut: another round of heavy promotions, engagement missing forecasts, or a run of bettor-friendly results could hit revenue and margins at once. Regulatory shifts—be it steeper taxes or new competitors operating under different rules—add an extra layer of uncertainty.
All eyes turn to the earnings report coming Feb. 12. Investors will watch closely for updates on betting volumes, marketing costs, and profit outlooks.
