GET DAILY SIGNALSDraftKings (DKNG) Drops -18% to -25% After Q3 Revenue and Earnings Miss
Key Takeaways
- DraftKings reported third-quarter 2026 revenue of $1.329 billion, up 16% year over year, but below the roughly $1.40–$1.41 billion consensus estimate.
- The company posted an adjusted loss of $0.53 per share, wider than the analyst consensus of about a $0.36 per-share loss, driven by heavy spending on its Predictions business.
- On a GAAP basis, net loss widened to $468.7 million, or $0.94 per share, compared with a $256.8 million loss a year earlier.
- DraftKings cut its full-year 2026 revenue guidance to $6.35–$6.55 billion and reduced its adjusted EBITDA outlook to $175–$275 million.
- Shares fell sharply in after-hours trading as investors digested the softer results and a larger-than-expected investment in the newer Predictions segment.
- For more detail on DraftKings, explore its Major News, Today's Price Move, Price Targets, and Forecast pages.
Earnings Context and Why It Matters
DraftKings’ third-quarter results represent a notable checkpoint for the company as it weighs its established sports betting and iGaming operations against heavier outlays for the newer Predictions offering. Shares had risen roughly 20% in the six weeks leading up to the report on optimism over political and regulatory developments, including positive signals in Texas. That momentum created elevated expectations, and the revenue shortfall plus lowered guidance quickly shifted sentiment. In my view, the quarter illustrates how expansion efforts can weigh on near-term profitability even when management signals stronger results ahead in 2027. The reaction shows how closely the market is watching the pace and expense of the Predictions rollout.
Reported Results
For the third quarter ended September 30, 2026, DraftKings posted revenue of $1.329 billion, a 16% rise from $1.144 billion a year earlier yet short of the $1.40–$1.41 billion consensus. Adjusted loss per share came in at $0.53, wider than the expected $0.36 loss. On a GAAP basis, the net loss expanded to $468.7 million, or $0.94 per share, from $256.8 million, or $0.52 per share, in the prior-year quarter. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry. Adjusted EBITDA turned more negative at $316.9 million versus $126.5 million a year ago, reflecting the stepped-up investment in Predictions. Core operating metrics stayed solid, with average monthly unique payers rising 13% to 4.1 million and average revenue per payer increasing 3% to $109.
Market Reaction and Investor Sentiment
Investors reacted negatively to the release. DraftKings shares declined sharply in after-hours trading, with reports citing drops between roughly 18% and 25%. The move reflected both the missed revenue and earnings targets and the trimmed full-year guidance. Particular attention focused on the larger-than-expected adjusted EBITDA investment in Predictions, now projected at $650–$700 million for 2026. The pullback also erased much of the pre-earnings premium tied to regulatory optimism and left the stock near the lower end of its 52-week range.
Forward Outlook and Key Factors to Monitor
The company lowered its fiscal 2026 revenue range to $6.35–$6.55 billion from the prior $6.5–$6.9 billion and below the roughly $6.65 billion consensus. Adjusted EBITDA guidance for the year was cut to $175–$275 million from the earlier $700–$900 million range, primarily because of higher Predictions spending. Management balanced the near-term adjustment with a more positive 2027 outlook, introducing revenue guidance of $7.35–$7.75 billion (implying about 17% growth at the midpoint) and adjusted EBITDA of $800 million to $1 billion. Core operations are expected to generate $6.7–$7.0 billion in 2027 revenue, with Predictions adding $650–$750 million. I’m watching this closely to see how the expansion plays out. Looking ahead, key items to track include the speed at which Predictions scales relative to its costs, the performance of the core sports betting and iGaming segments, and any easing of margin pressure once the heavy investment phase matures. Regulatory moves, especially in states such as Texas, along with customer acquisition and monetization trends, will continue to influence sentiment.
Using AI Tools for Deeper Analysis
When reviewing earnings like these, I often rely on Tickeron’s AI Screener to quickly filter comparable names and spot patterns across the sector. The tool lets me apply custom criteria around fundamentals, technicals, and performance metrics, which helps put the current results in broader context without spending hours on manual screens.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
DKNG's MACD Histogram just turned positive
The Moving Average Convergence Divergence (MACD) for DKNG turned positive on October 12, 2026. Looking at past instances where DKNG's MACD turned positive, the stock continued to rise in 41 of 45 cases over the following month. The odds of a continued upward trend are 90%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 16, 2026. You may want to consider a long position or call options on DKNG as a result. In 70 of 87 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 80%.
DKNG moved above its 50-day moving average on November 02, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +5.96% 3-day Advance, the price is estimated to grow further. Considering data from situations where DKNG advanced for three days, in 239 of 295 cases, the price rose further within the following month. The odds of a continued upward trend are 81%.
Bearish Trend Analysis
The RSI Oscillator demonstrated that the stock has entered the overbought zone. This may point to a price pull-back soon.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 10 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where DKNG declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 79%.
DKNG broke above its upper Bollinger Band on November 04, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for DKNG entered a downward trend on October 27, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 43 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: DKNG's P/B Ratio (20.506) is very high in comparison to the industry average of (3.685). DKNG's P/E Ratio (-67.200) is considerably lower than the industry average of (0.328). Projected Growth (PEG Ratio) (0.052) is also within normal values, averaging (0.476). Dividend Yield (0.000) settles around the average of (0.012) among similar stocks. P/S Ratio (1.935) is also within normal values, averaging (1.692).
The Tickeron Price Growth Rating for this company is 49 (best 1 - 100 worst), indicating steady price growth. DKNG’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 96 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 97 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. DKNG’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 99, placing this stock worse than average.
Industry description
Market Cap
High and low price notable news
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
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General Information
a digital sports entertainment and gaming company, which provides online and retail sports wagering offerings, online daily fantasy contests and online casino games
Industry CasinosGaming
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