Citizens has reaffirmed a Market Outperform rating on DraftKings Inc. (NASDAQ:DKNG) with a $38.00 price target, while the stock trades near its 52-week low. Shares recently changed hands at $21.81, close to the low end of the past year at $21.01. InvestingPro analysis cited in the firm’s note views the shares as appearing undervalued relative to Fair Value estimates at current levels.
The research note emphasizes that DraftKings should continue to advance its product set so long as the broader industry remains active. Still, the firm flagged decelerating top-line momentum ahead - guidance points to revenue growth of roughly 11% in 2026 at the midpoint, with further slowing projected into 2027 in a scenario of limited additional U.S. legalization.
Workforce dynamics factor prominently in Citizens’ assessment. Over the past three years DraftKings’ employee headcount rose by 31%, equivalent to about 1,300 additional staff. Given that expansion, Citizens expects any future restructuring to align with the lower end of the 2% to 15% reduction range observed among technology-sector peers in recent years.
The company has precedent for targeted cuts: DraftKings carried out a restructuring in 2023 that eliminated roughly 3.5% of its payroll, largely impacting roles outside the United States. Citizens views the softer growth outlook as creating scope for rationalizing the workforce without implying a change to the company’s operational profile.
Operational efficiency underpins that view. DraftKings reported a gross profit margin of 76% - a figure Citizens highlights as indicative of strong cost structure and execution despite near-term headwinds to growth.
Market participants and analysts have registered a range of positions ahead of upcoming company events. BofA Securities reiterated a Neutral rating and a $27 price target as DraftKings approaches its investor day, where management is expected to outline forecasts and medium-term financial targets. Citizens’ Market Outperform stance, by contrast, underscores positive trends such as a double-digit increase in non-NFL handle cited in its note.
Stifel updated its outlook as well, lowering its price target to $40 from $44 but retaining a Buy rating. Stifel’s call reflects concerns about promotional spending and a conservative view on near-term prospects - a posture the firm says was influenced by investor skepticism toward DraftKings’ guidance and market assumptions.
Corporate activity also surfaced in the reporting period. DraftKings expanded its retail and online footprint in Puerto Rico - a retail sportsbook opened last November at Foxwoods El San Juan Casino, and the operator has since launched an online sportsbook accessible to residents who complete in-person registration at that same venue.
Insider buying added another data point: company director Harry Sloan purchased 100,000 shares for about $2.19 million, bringing his total holdings to 350,219 shares. Citizens and other brokerages framed these developments as part of a broader set of inputs shaping investor views.
Collectively, the recent broker notes, management guidance, an elevated employee base, and operational metrics like the 76% gross margin contribute to a mixed but closely watched picture. Analysts and investors are parsing the implications for cost structure, promotional spending, and medium-term growth targets ahead of the company’s presentations and any potential workforce adjustments.