TLDR
- ARK ETFs sold 480,919 DraftKings (DKNG) shares worth $11.16 million on February 19, continuing a two-day selling streak
- Needham cut its DKNG price target from $52 to $35, keeping a Buy rating after a Q4 2025 earnings miss
- Northland lowered its target from $30 to $24 with a Market Perform rating, citing heavy investment cycles
- TD Cowen slashed its target from $45 to $30, noting the stock sold off despite Q4 results beating expectations
- Multiple analysts flagged DraftKings’ weaker 2026 guidance as the core concern, driven by prediction market spending
DraftKings (DKNG) had a rough week. The stock is dealing with analyst price target cuts from multiple firms and a notable exit by Cathie Wood’s ARK Invest.
On February 19, ARK ETFs sold 480,919 DKNG shares through its ARKK fund, totaling $11.16 million. This followed a similar sale the day before, signaling a clear reduction in ARK’s position.
The selling comes after DraftKings reported its Q4 2025 earnings, which disappointed investors on the guidance front.
Needham was one of the first to respond. The firm cut its price target from $52 to $35 on February 17, though it kept its Buy rating. The analyst said DraftKings needs to build a prediction market product that can compete with Kalshi to drive real revenue and cash flow growth.
Needham also pointed to the upcoming investor day as a potential positive catalyst, but said the company has work to do first.
Northland’s Greg Gibas took a more cautious stance. He lowered his price target from $30 to $24 and kept a Market Perform rating. Gibas cited a sharp downward revision to DraftKings’ 2026 guidance, which he said reflects both higher spending on prediction markets and costs tied to new jurisdiction launches.
He added that management appears to be building in a higher degree of conservatism as the company navigates these investment cycles.
Analysts Split on Buy vs. Hold
TD Cowen’s Lance Vitanza also cut his target, dropping it from $45 to $30 while keeping a Buy rating. His note pointed out something that stood out: Q4 results actually beat expectations, yet the stock still sold off hard due to the weak 2026 outlook.
That gap between solid quarterly results and a falling stock price tells you how much weight investors are putting on forward guidance right now.
Canaccord also adjusted its view on DKNG, flagging slowing state handle trends as a concern even as Q4 held up relatively well.
ARK Shifts Capital Elsewhere
While ARK was selling DraftKings, it was putting money to work elsewhere. The firm bought 964,342 shares of Figma (FIG) for $23.3 million and 781,085 shares of Compass Pathways (CMPS) for $6.6 million on the same day.
ARK also added to its Recursion Pharmaceuticals (RXRX) position, picking up 780,532 shares for $2.75 million.
The reallocation suggests ARK sees better near-term opportunities outside of online sports betting.
DKNG was down 0.34% at the time of reporting. The stock has now absorbed price target cuts from at least three major Wall Street firms in the same week, all centered on the same issue: the 2026 guidance reset.
