Update shared on04 Sep 2025
Analysts maintain a positive outlook on DraftKings driven by ongoing revenue growth, market expansion, and asset revaluation despite manageable tax and regulatory risks, leaving the consensus Analyst Price Target unchanged at $54.86.
Analyst Commentary
- Bullish analysts anticipate continued revenue growth driven by the legalization of online sports betting in additional states, market share gains, and improving customer retention, supported by declining acquisition costs and strong Q2 performance.
- The recent sale of Boyd's FanDuel stake at a high valuation is seen as raising the implied value of DraftKings’ assets, with consensus expecting temporary multiple expansion for U.S. gaming stocks and a broadly positive market sentiment toward DraftKings.
- Analysts see DraftKings likely moving into prediction markets—potentially by acquiring Railbird Exchange—which would offer high-margin, scalable access to underpenetrated states and enable avoidance of certain regulatory and tax burdens.
- Tax and regulatory headwinds in states such as New Jersey, Illinois, Louisiana, and Maryland remain concerns, but several analysts view recent legislative outcomes and the ability to offset taxes via surcharges or lower promotions as manageable, de-risking further increases.
- Seasonal tailwinds from football, higher in-play betting engagement, and growth in parlay betting are expected to support momentum, though some maintain a cautious outlook due to conservative H2 estimates, pending regulatory developments, and potential for outlook revisions.
What's in the News
- DraftKings is expected to enter the regulated prediction market sector following Flutter Entertainment's partnership with CME Group, possibly via a different route such as an acquisition of Railbird, though regulatory relations remain a concern (Jefferies, August 2025).
- DraftKings maintained its 2025 revenue guidance at $6.2-6.4 billion—implying 32% YoY growth—and expects to achieve the higher end of this range due to favorable sportsbook outcomes and strong core performance (Corporate Guidance, August 2025).
- The company completed buybacks totaling 1.56% of outstanding shares for $290.66 million since August 2024, including a recent $100.41 million tranche (Buyback Update, August 2025).
- DraftKings was granted a direct mobile sports betting license in Missouri, set to launch December 1, 2025, marking its 29th U.S. state; its responsible gaming tools continue to expand (Regulatory Authority – Compliance, August 2025).
- Four class action lawsuits in California allege DraftKings’ DFS contests are illegal gambling; following these filings, the CA Attorney General affirmed DFS is unlawful in the state, increasing potential legal risks (Lawsuits & Legal Issues, July 2025; NJ.com reporting on regulatory/tax environment, June 2025).
Valuation Changes
Summary of Valuation Changes for DraftKings
- The Consensus Analyst Price Target remained effectively unchanged, at $54.86.
- The Net Profit Margin for DraftKings remained effectively unchanged, at 13.76%.
- The Consensus Revenue Growth forecasts for DraftKings remained effectively unchanged, at 20.5% per annum.
Disclaimer
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