TLDR
- DraftKings stock was up 0.67% in Friday premarket trading at $22.62
- LeBron James is reportedly switching from DraftKings to Polymarket in a $15 million deal
- Needham reiterated a Buy rating with a $35 price target after an investor dinner with DraftKings management
- DKNG is down 9% over the past week and 35% year-to-date, trading below all key moving averages
- Analysts expect Q3 revenue of $1.42 billion and a narrowed loss of 16 cents per share at the November earnings report
DraftKings stock ticked up 0.67% to $22.62 in Friday premarket trading, even as the stock sits 35% lower year-to-date and 9% down over the past week.
The move comes after NBA star LeBron James reportedly agreed to a $15 million deal to switch from DraftKings to Polymarket, a prediction market platform. The news is drawing attention to a category that sits alongside traditional sports betting rather than directly inside it.
Investors are watching whether consumer attention is beginning to drift toward prediction markets, though DraftKings management pushed back on the idea that competition is a growing threat.
Needham reiterated its Buy rating and $35 price target on DKNG after hosting an investor dinner with CEO Jason Robins and CFO Alan Ellington. The firm said the primary topic was predictive modeling.
DraftKings management told investors its data-driven approach to customer acquisition is driving market share, particularly with new customers. They said the competitive environment in core online sports betting has been steady this year and that competition fears are overblown.
The company highlighted expansion opportunities in iGaming across Maryland, Virginia and Washington D.C., and online sports betting in Georgia. A Supreme Court decision on predictive modeling is expected, though the outcome remains uncertain.
DraftKings is focused on fixed cost reduction as it works toward multiple billions in EBITDA. The company carries a gross profit margin of 76%, with EBITDA reaching $123 million over the last twelve months. Analysts expect it to turn profitable this year.
Technical Picture Still Cloudy
The chart tells a different story. DKNG is trading 7.8% below its 20-day SMA, 7.7% below its 50-day SMA, 9.5% below its 100-day SMA, and 14.8% below its 200-day SMA. That setup means rallies can hit resistance quickly.
MACD is below its signal line with a negative histogram, which points to buyer momentum fading. A death cross formed in October 2025, with the 50-day SMA still below the 200-day SMA.
Key resistance sits at $27.00, near the 200-day SMA at $26.49 and 200-day EMA at $27.06. Support is at $21.50, just above the 52-week low of $20.46.
Analyst Targets and Earnings Outlook
Recent analyst moves have been mostly positive. Wolfe Research started coverage with an Outperform and a $40 target on September 2. Citizens raised its target to $37 on September 8. Bernstein raised its target to $29 on September 3. The consensus sits at a Buy with an average target of $34.14.
The next big catalyst is the estimated November 5, 2026 earnings report. Wall Street expects revenue of $1.42 billion, up from $1.14 billion a year ago, and a loss of 16 cents per share, improved from a 26-cent loss the prior year.
On the broader market side, prediction market volumes hit $3.17 billion on Saturday and $3.12 billion on Sunday during NFL Week 1, according to Jefferies. DraftKings saw combo volumes rise 22% to $18.8 billion in August, per Stifel, which also holds a Buy rating on the stock.
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