Could DKNG Be a 50% Rebound Stock?

Could DKNG Be a 50% Rebound Stock?

Vandita Jadeja

Thu, September 3, 2026 at 5:30 PM GMT+3 5 min read

• DKNG -0.74%
• FLUT -2.18%

Quick Read

• DKNG has fallen 51% over the past year to $24.42, but the bull case targets $47.61 if its Predictions product scales and sportsbook margins recover.

• Flutter (FLUT) trades at 17x forward earnings and EV/EBITDA of 16 versus DraftKings' 24x and 119, exposing DKNG's steep unproven growth premium.

• DraftKings' adjusted EBITDA collapsed to $115M from $301M a year ago as unfavorable sports outcomes and Predictions launch spending crushed margins.

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DraftKings (NASDAQ:DKNG) has been one of 2026's most disappointing large caps, sliding 31.98% year to date and 51.15% over the past year. With shares at $24.42, bulls are asking whether a 50% rebound is realistic.

Our 24/7 Wall St. price target for DraftKings is $22.56 over the next 12 months, implying -7.69% downside and a hold rating at 90% confidence.

Why We Could Be Wrong

Our 24/7 Wall St. price target sits just below the current price, and DraftKings has real optionality. A strong NFL season could reset sportsbook margins, and the Predictions product is growing faster than anticipated with annualized volume traded jumping from $2.3 billion to $11 billion between April and July. Treat our target as one datapoint. A full bull case sits below.

A Rough Year Meets a Predictions Pivot

Shares fell 9.11% in the past week and now trade well off the $48.78 52-week high, closer to the $20.46 low. Q2 2026 revenue of $1.44 billion came in missing expectations by 4.48%, and adjusted EPS of $0.09 came in missing expectations against a $0.1917 consensus.

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Adjusted EBITDA compressed to $114.60 million from $300.64 million a year earlier as sports outcomes and Predictions launch spend weighed on margins. Management kept FY26 guidance of $6.5 billion to $6.9 billion in revenue and $700 million to $900 million in adjusted EBITDA intact.

Bull Case for $47+

Bulls have a clean story. Robins told investors DraftKings has "an excellent product experience," and July sportsbook handle was up 20% year over year post World Cup. Customer acquisition costs came in 25% better than anticipated, and more than 600,000 customers have engaged with Predictions year to date.

Wall Street's average target sits at $34.98, with 24 Buy and 5 Strong Buy ratings. Our own model's bull case reaches $47.61 in 12 months, roughly 94.85% upside, if Predictions scales into a real second engine and sportsbook margins normalize.

What Could Go Wrong

Sportsbook revenue fell 10.6% in Q2, and sports net revenue margin compressed to 6.8% from 8.7%. Sales and marketing surged to $322.54 million.

Bulls would counter that the margin hit reflects customer-friendly outcomes plus a deliberate $200 million to $300 million Predictions investment. Still, the bear scenario in our model prices DKNG at $21.32, roughly -12.76%, if regulatory friction on event contracts intensifies.

How DraftKings Compares to Flutter

The cleanest comp is Flutter Entertainment (NYSE:FLUT), which owns FanDuel and competes head-to-head in US sportsbook. Flutter trades at 17x forward earnings against DraftKings at 24x, and its EV/EBITDA of 16 is a fraction of DraftKings' 119. Flutter's TTM revenue of $17.16 billion dwarfs DraftKings' $6.22 billion.

That gap makes our 24/7 Wall St. price target for DKNG look reasonable rather than aggressive: DraftKings already commands a growth premium over the category leader, and further multiple expansion requires proof.

DraftKings Price Prediction 2026-2030

My verdict on DraftKings is hold. The 24/7 Wall St. price target of $22.56 at 90% confidence reflects a real disconnect between the current forward EPS profile and today's price.

I would be a buyer here if Q3 shows sportsbook margin recovery above 7% and Predictions crosses one million active customers. I would stay on the sidelines if promo spend continues climbing without matching handle growth. A 50% rebound is achievable, but only under the bull path.

These projections assume DraftKings continues executing on Predictions and defends sportsbook share. Meaningful upside could arrive from California or Texas legalization, while regulatory action on event contracts could push actual outcomes toward the model's bear path.

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