Bernstein SocGen Group has cut its price target on DraftKings Inc. (DKNG) to $28 from $32 but maintained an Outperform rating on the online sports-betting operator. The reduced target sits close to InvestingPro's Fair Value assessment and follows a nearly 60% retreat in the stock from its 52-week high of $53.61.
The firm told investors the adjustment reflects concerns about the clarity of near-term returns after DraftKings' most recent guidance. Analyst Ian Moore said the company's outlook left investors seeking more definitive signals on when and how the business will translate current investments into returns.
InvestingPro data cited by Bernstein highlights that DraftKings continues to post robust gross profit margins, measured at 76.11%. Analysts tracked by the same service are forecasting that the company will reach profitability this year, a point Bernstein acknowledges even as it flags visibility risks.
One area drawing particular attention is prediction markets. DraftKings offered commentary on possible growth spending in 2026, but its revenue guidance excluded prediction markets. Bernstein regards prediction markets as an appealing incremental growth avenue for online sports betting operators and expects clarity from management ahead of the company's March 2 investor presentation.
"March 2 will be pivotal; We have long considered prediction markets to be an attractive incremental growth opportunity for OSB operators. That said, yesterday's reset on a soft guide left something to be desired for investors demanding high visibility on near-term returns. With clarifying commentary around the potential quantum of 2026 growth spend but not yet around the topline opportunity (revenue guide was ex. predictions), the onus now sits on management to lay out a clear path to Predictions' category dominance at the March 2nd investor presentation."
In related developments, DraftKings reported fiscal fourth-quarter results for 2025 that beat analyst expectations. The company posted an earnings per share (EPS) of $0.25, above the forecasted $0.18, and generated revenue of $1.99 billion versus a consensus projection of $1.98 billion. The $1,989 million in quarterly revenue represented 43% year-over-year growth.
DraftKings' fourth-quarter performance also reflected a $50 million favorable impact tied to outcomes, partly due to easier comparisons with negative NFL results from the fourth quarter of 2024. Despite the upside in both EPS and revenue, the stock experienced a notable decline in pre-market trading following the releases and guidance reset.
Separately, Guggenheim kept a Buy rating on DraftKings but trimmed its price target to $37.00 from $42.00, pointing to its view on the firm's outlook for 2026. Bernstein has flagged the March 2 investor presentation as a key moment for management to better define the trajectory and address the outstanding questions around the predictions category and near-term return visibility.
What happens next: Investors and analysts will be watching DraftKings' March 2 investor presentation for management's roadmap on prediction markets and the scale of planned 2026 growth spending. The firm's ability to convert high gross margins and recent profitability projections into visible returns remains central to near-term sentiment.