DraftKings (DKNG) Stock Forecast & Price Target

DraftKings has demonstrated strong financial performance, highlighted by an 80-basis-point year-over-year increase in structural sportsbook hold, surpassing company targets. With the company's cross-sell strategy effectively integrating new products, it has enhanced customer lifetime value (LTV) and mitigated churn, contributing to a positive outlook. Additionally, DraftKings raised its 2025 revenue guidance by $50 million to a midpoint of $6.45 billion, fueled by a significant increase in Same Game Parlays performance, particularly for the NFL and NBA.

DraftKings is experiencing significant challenges as evidenced by an adjusted EBITDA decline of approximately $104 million in a recent quarter and rising customer acquisition costs (CAC), which are leading to increased competitive pressures and lower conversion rates. The company reported a deceleration in handle growth from 25% to 15%, reflecting a broader trend of declining user engagement and revenue projections that have been revised downward due to heightened operational expenses. Additionally, ongoing issues such as broadcast latency affecting user experience further complicate prospects for recovery, suggesting sustained pressures on the company's financial performance in the near term.