DraftKings (DKNG) Stock Plunges 35% in 2025, But Wall Street Projects 50% Rally Ahead

Key Highlights

• DKNG shares advanced 0.67% to $22.62 during Friday’s premarket session
• NBA superstar LeBron James is reportedly departing DraftKings for Polymarket in a deal valued at $15 million
• Needham maintained its Buy recommendation with a $35 per share price objective following management discussions
• Shares have tumbled 9% in the past five trading sessions and are down 35% since January
• Wall Street forecasts Q3 sales of $1.42 billion with per-share losses narrowing to 16 cents when earnings arrive in November

Shares of DraftKings climbed 0.67% to reach $22.62 during Friday’s early trading session, though the online sports betting giant remains deeply underwater with a 35% decline year-to-date and a 9% pullback over the trailing week.

DraftKings Inc., DKNG

The uptick follows reports that basketball icon LeBron James has inked a $15 million partnership agreement to transition from DraftKings to Polymarket, a blockchain-based prediction marketplace. This development has sparked conversations about whether prediction platforms represent a growing competitive threat to conventional sports wagering businesses.

Market participants are evaluating whether user engagement is gradually migrating toward prediction markets, although DraftKings leadership has downplayed concerns about intensifying competitive pressures in the space.

Needham confirmed its Buy stance and $35 valuation objective for DKNG following an investor event featuring Chief Executive Officer Jason Robins and Chief Financial Officer Alan Ellington. Predictive analytics emerged as the central discussion theme.

Company executives emphasized to investors that their analytics-powered customer acquisition strategy is capturing market share, especially among first-time users. Leadership characterized the competitive landscape in online sports betting as relatively stable throughout the year and dismissed competitive worries as exaggerated.

Management pointed to growth prospects in iGaming throughout Maryland, Virginia and Washington D.C., alongside online sports betting expansion in Georgia. A Supreme Court ruling on predictive modeling awaits, though the timing and direction remain unclear.

The company is prioritizing fixed cost optimization while pursuing a path toward generating multiple billions in EBITDA. DraftKings operates with a gross margin of 76%, having generated $123 million in EBITDA over the trailing twelve-month period. Analyst consensus anticipates positive earnings this fiscal year.

Bearish Technical Signals Persist

The price action paints a challenging picture. DKNG sits 7.8% beneath its 20-day simple moving average, 7.7% under its 50-day SMA, 9.5% below its 100-day SMA, and 14.8% under its 200-day SMA. This positioning suggests potential upward moves could encounter resistance at multiple levels.

The MACD indicator trades beneath its trigger line with a bearish histogram reading, signaling weakening bullish momentum. A bearish death cross pattern materialized in October 2025, characterized by the 50-day SMA crossing below the 200-day SMA.

Overhead resistance emerges around $27.00, coinciding with the 200-day SMA at $26.49 and the 200-day exponential moving average at $27.06. Downside support appears at $21.50, marginally above the annual low of $20.46.

Street Expectations and Upcoming Earnings

Wall Street activity has leaned constructive recently. Wolfe Research initiated coverage with an Outperform recommendation and $40 objective on September 2. Citizens elevated its projection to $37 on September 8. Bernstein increased its target to $29 on September 3. The aggregate Street view reflects a Buy rating with a mean price target of $34.14.

The upcoming catalyst arrives with the projected November 5, 2026 quarterly report. Analysts anticipate revenue reaching $1.42 billion, climbing from $1.14 billion in the comparable period, alongside a per-share loss of 16 cents, representing improvement from the 26-cent deficit recorded previously.

Regarding broader industry metrics, prediction market transaction volumes registered $3.17 billion on Saturday and $3.12 billion on Sunday during the opening NFL weekend, according to Jefferies data. DraftKings experienced a 22% surge in parlay volumes to $18.8 billion throughout August, per Stifel research, which also holds a Buy recommendation on the shares.