DKNG Should I Buy
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DraftKings Inc. is not a good buy for a beginner, long-term investor at this time. The stock has experienced significant price drops recently, driven by disappointing revenue forecasts for 2026 and increased competition. Technical indicators show a bearish trend, and there are no strong proprietary trading signals to suggest a favorable entry point. While the company has shown strong revenue growth in Q4 2025, its financial performance remains weak with negative net income and EPS. Analysts have lowered price targets, and the options data indicates a bearish sentiment. Given the investor's preference for long-term growth, it is better to wait for more stability and positive catalysts before considering an investment in DKNG.
The technical indicators for DKNG are bearish. The MACD histogram is negative and expanding, the RSI is at 24.18 (neutral zone but close to oversold), and moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading below key support levels, with S1 at 25.348 and S2 at 24.277, suggesting further downside potential.
The company also benefits from NBA handle share momentum.
DraftKings forecasts 2026 revenue below analyst expectations, leading to a 15.2% drop in after-hours trading. Increased competition from prediction markets like Kalshi and concerns about decelerating handle trends are putting pressure on the business model. Analysts have broadly lowered price targets, and the company continues to report negative net income and EPS.
DraftKings reported Q4 2025 revenue of $1.99 billion, a 43% YoY increase. However, the company expects 2026 revenue to fall short of analyst estimates. In Q3 2025, revenue grew by 4.43% YoY, but net income dropped by -12.56%, EPS fell by -13.33%, and gross margin declined by -2.39%. These trends indicate ongoing financial challenges.
Analysts have broadly lowered price targets for DKNG, with ratings ranging from Neutral to Buy. While some analysts see potential for long-term growth, concerns about competition, slowing revenue growth, and increased promotional spending in 2026 have led to cautious outlooks. Price targets now range from $32 to $53, reflecting mixed sentiment.
