DraftKings (NASDAQ:DKNG) Shares Gap Down After Analyst Downgrade

Key Points

• DraftKings shares fell after Barclays cut its price target from $34 to $27, while retaining an Overweight rating. The stock opened at $17.79, down from its prior close of $18.51.
• Analyst views were mixed: Stifel and JPMorgan downgraded the stock, while several firms maintained Buy ratings. MarketBeat reported an overall “Moderate Buy” consensus and an average price target of $29.61.
• DraftKings missed quarterly expectations, reporting a loss of $0.53 per share versus the $0.41 consensus and revenue of $1.33 billion versus $1.39 billion expected, despite year-over-year revenue growth of 16.2%.

DraftKings Inc. (NASDAQ:DKNG - Get Free Report) gapped down prior to trading on Monday after Barclays lowered their price target on the stock from $34.00 to $27.00. The stock had previously closed at $18.51, but opened at $17.79. Barclays currently has an overweight rating on the stock. DraftKings shares last traded at $18.4030, with a volume of 5,100,668 shares trading hands.

A number of other equities analysts have also recently issued reports on DKNG. Stifel Nicolaus cut shares of DraftKings from a "buy" rating to a "hold" rating and reduced their price objective for the company from $32.00 to $21.00 in a research note on Monday. Bank of America reiterated a "buy" rating on shares of DraftKings in a report on Friday. Jefferies Financial Group reissued a "buy" rating and issued a $28.00 target price on shares of DraftKings in a research note on Monday. JPMorgan Chase & Co. cut DraftKings from an "overweight" rating to a "neutral" rating and set a $21.00 target price on the stock. in a report on Monday. Finally, Citigroup decreased their target price on DraftKings from $32.00 to $28.00 and set a "buy" rating for the company in a research report on Monday, October 12th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-seven have issued a Buy rating, nine have given a Hold rating and three have issued a Sell rating to the company. According to data from MarketBeat, the company currently has an average rating of "Moderate Buy" and an average price target of $29.61.

Insider Buying and Selling at DraftKings

In other news, Director Jocelyn Moore sold 10,759 shares of DraftKings stock in a transaction on Wednesday, August 19th. The shares were sold at an average price of $24.05, for a total transaction of $258,753.95. Following the transaction, the director directly owned 1,881 shares of the company's stock, valued at $45,238.05. This trade represents a 85.12% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 47.18% of the stock is currently owned by corporate insiders.

Key Headlines Impacting DraftKings

Here are the key news stories impacting DraftKings this week:

• Positive Sentiment: BTIG maintained a Buy rating with a $23 target, while Truist kept Buy and Bernstein kept Outperform, despite each cutting its price target. The revised targets imply potential upside from the approximately $18.50 price cited in the reports. BTIG rating information
• Positive Sentiment: A report highlighted rising hopes for legalized sports betting in Texas, a potential longer-term growth opportunity for DraftKings, while scrutiny of prediction markets could also affect the competitive landscape. Article on Texas betting and prediction markets
• Neutral Sentiment: Sportsbook net revenue grew 36% year over year in Q3, but DraftKings expects to invest $650 million to $700 million in its prediction-market business in 2026, raising questions about the cost and payoff of that expansion. Article on DraftKings long-term takeaways
• Negative Sentiment: DraftKings reported worse-than-expected Q3 results and cut fiscal 2026 guidance. The news drove a reported 21% one-session decline and helped push shares to a 52-week low, reinforcing concerns about costs, business challenges and demand. Article on analyst forecasts after Q3 results
• Negative Sentiment: UBS, JPMorgan and Stifel downgraded the stock; JPMorgan moved from Overweight to Neutral, saying it is increasingly difficult to recommend. Several firms also cut targets—including Truist to $22, Bernstein to $22 and BTIG to $23—adding pressure even though the revised targets remain above the cited share price. Article on analyst downgrades

Institutional Trading of DraftKings

Hedge funds have recently added to or reduced their stakes in the business. Kornitzer Capital Management Inc. KS lifted its holdings in DraftKings by 0.4% during the 3rd quarter. Kornitzer Capital Management Inc. KS now owns 176,620 shares of the company's stock worth $3,356,000 after purchasing an additional 691 shares during the last quarter. Integrity Advisory Solutions LLC grew its holdings in DraftKings by 8.2% in the 3rd quarter. Integrity Advisory Solutions LLC now owns 10,571 shares of the company's stock valued at $201,000 after buying an additional 803 shares in the last quarter. CoreCap Advisors LLC grew its holdings in DraftKings by 336.5% in the 2nd quarter. CoreCap Advisors LLC now owns 1,148 shares of the company's stock valued at $29,000 after buying an additional 885 shares in the last quarter. Englebert Financial Advisers LLC increased its position in DraftKings by 1.3% during the 3rd quarter. Englebert Financial Advisers LLC now owns 68,237 shares of the company's stock worth $1,297,000 after buying an additional 897 shares during the period. Finally, Janney Montgomery Scott LLC increased its position in DraftKings by 2.0% during the 1st quarter. Janney Montgomery Scott LLC now owns 51,855 shares of the company's stock worth $1,121,000 after buying an additional 1,028 shares during the period. Institutional investors and hedge funds own 37.70% of the company's stock.

DraftKings Stock Down 0.6%

The company has a current ratio of 1.02, a quick ratio of 1.02 and a debt-to-equity ratio of 3.22. The stock has a market cap of $9.14 billion, a P/E ratio of -23.01, a PEG ratio of 2.43 and a beta of 1.65. The firm has a 50-day simple moving average of $21.51 and a two-hundred day simple moving average of $24.06.

DraftKings (NASDAQ:DKNG - Get Free Report) last announced its earnings results on Thursday, November 5th. The company reported ($0.53) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.41) by ($0.12). DraftKings had a negative net margin of 5.91% and a negative return on equity of 36.21%. The business had revenue of $1.33 billion during the quarter, compared to the consensus estimate of $1.39 billion. During the same period in the previous year, the firm posted ($0.26) EPS. The company's revenue was up 16.2% compared to the same quarter last year. Equities research analysts expect that DraftKings Inc. will post 0.31 earnings per share for the current fiscal year.

About DraftKings

DraftKings Inc is a digital sports and entertainment company founded in 2012. It began as a daily fantasy sports platform and has since expanded into online sports betting and gaming.

The company offers daily fantasy contests, a sportsbook and online casino products, including games such as slots and table games. Its services are available in a range of U.S. jurisdictions and in Ontario, Canada, where permitted by local regulations.

DraftKings is headquartered in Boston, Massachusetts.

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