DraftKings Investor Day Could Spark the Stock, Says Analyst

For shareholders of DraftKings (NASDAQ: DKNG), Monday's investor day is a must-watch event because the stock has dropped by around 31% since the beginning of the year. According to one analyst, the incident might give the stock a shock.

The three-year core business outlook and updates on the operator's prediction markets plans are likely to be highlighted during DraftKings' investor day, according to a new research to clients from Jefferies analyst David Katz.

With its DraftKings Predictions product, the business recently entered that industry, and some investors are considering the costs required to compete with established players like Kalshi and Polymarket as well as an expanding pool of competitors.

The gambling company could also shed more light on the 2026 financial projection it released last month, which left investors underwhelmed, at the investor event.

"Our $6.89 billion is at the top end of DKNG’s FY26 revenue guide of $6.5 billion to $6.9 billion (though in-line with consensus), given that management excluded any revenue from Prediction Markets this year, while we and the Street are including some,” observes Katz. “For FY26 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), our $811 million estimate is modestly below consensus of $821 million, though in-line with the midpoint of current guidance of $700 million to $900 million.”

The expert also notes that DraftKings may provide color to the introduction of sports betting in Alberta, Canada, and Maine.

 

Thinking About Market Predictions

DraftKings guided $50 million to $200 million in prediction markets spending this year, underscoring the competitive intensity of that young industry; it could be a natural evolution because the operator has long been one of the most tech-centric wagering entities.

According to Katz, investor day commentary on prediction markets may include discussions about revenue, product development, marketing expenditures, and the entire addressable market. This suggests that the event may emphasize a variety of possible outcomes for DraftKings Predictions.

The operator's intentions for internal market making, which might result in efficiency and possibly some additional revenue, are one area where investors are sure to want clarification.

“A key point in DKNG’s strategy is market making, which could lead to a wide range of outcomes,” adds Katz. “We believe that DKNG intends to act as a market maker on DraftKings Predict and on competitors’ designated contract markets, which brings to bear the company’s risk management capabilities, which we expect to be a discussion point as well.”

 

Is the Stock of DraftKings Ready to Turn at Last?

The investor day comes shortly after DraftKings stated that it would be laying off up to 5% of its employees in an effort to save up to $30 million a year.

This contributed to a difficult period in which the business and rivals like Flutter Entertainment (NYSE: FLUT) have been beset by customer-friendly results and market players worrying about risks from yes/no transactions. Nevertheless, Katz rates the stock as a "buy" with a $46 price objective because he likes the setup. He also notes prediction markets aren’t denting DraftKings’ core business.

“Note that the alternative data continues to support management commentary that the impact to market share from the advent of predictions has been de minimis,” concludes the analyst. “Our view is that they set-up is now considerably more positive given the catalyst path, estimate composition, and 11X 2027E EBITDA of $1.1 billion.”