Analysts slash DraftKings ratings and price targets after Q3 loss and guidance cut
DraftKings reported third‑quarter 2026 revenue of $1.33 billion, up 16% year‑over‑year, but adjusted EBITDA widened to a $317 million loss. The company cut its 2026 adjusted EBITDA guidance by 72% at the midpoint and announced $650‑$700 million of spending on its Predictions business. In response, UBS, JPMorgan and Stifel downgraded the stock and lowered price targets to $21‑$22, while several other houses trimmed targets to $21‑$28.
Why it matters
The downgrades and target cuts reduce the valuation multiples investors will apply to DraftKings, lowering the stock’s upside potential in the near term (the new targets imply 13‑19% upside from the $18.51 close). The guidance cut also signals lower expected earnings for 2026, which may affect cash‑flow forecasts and debt‑service capacity.
Key facts
- 1Q3 2026 revenue was $1.33 billion, a 16% increase YoY. investing.com
- 2Adjusted EBITDA for the quarter was a loss of $317 million. 247wallst.com
- 3The company cut its 2026 adjusted EBITDA guidance by 72% at the midpoint, to $175‑$275 million from $700‑$900 million. 247wallst.com
- 4DraftKings spent $650‑$700 million on Predictions in 2026 and plans $250‑$350 million in 2027. 247wallst.com
- 5Shares fell 21% to $18.51 after the results. 247wallst.com
- 6UBS, JPMorgan and Stifel downgraded the stock and set new price targets of $22, $21 and $21 respectively. finance.yahoo.com
Summary written by AlphAI AI Desk from 20 of 40 sources. Not investment advice. Figures are as stated by the linked sources.