TLDR
- BMO Capital Markets raised its price target on DraftKings from $42 to $50, keeping an Outperform rating
- DraftKings unveiled a “Super App” combining Sportsbook, iGaming, and Predictions into one platform
- Prediction markets could represent a $10 billion gross revenue opportunity with 60–80% gross margins
- Director Harry Sloan bought 100,000 DKNG at $21.85, a ~$2.19M purchase, lifting his stake by ~40%
- DKNG is down ~50% over the past six months, currently trading around $23.85
DraftKings launched a unified Sports & Casino Super App at its Investor Day, and Wall Street is taking notice. BMO Capital Markets raised its price target from $42 to $50 on Tuesday, reiterating the stock as a Top Pick.
That $50 target implies roughly 109% upside from the current price of around $23.85. BMO cited the Investor Day presentation as the catalyst for the upgrade.
The Super App will combine Sportsbook, iGaming, and Predictions into a single account and wallet. The goal is to increase cross-selling between products and lower customer acquisition costs.
DraftKings also laid out a long-term view of its total addressable market. Management expects that market to grow at a 15% five-year compound annual growth rate to a midpoint of $67.5 billion.
The company projects adjusted EBITDA margins above 30% over the long term. BMO values the stock at 10 times 2027 estimated adjusted EBITDA.
Prediction Markets in Focus
One of the bigger talking points from Investor Day was prediction markets. BMO estimates these could represent a $10 billion gross revenue opportunity over time.
The margin profile is attractive. Prediction markets carry gross margins of 60–80%, compared to roughly 50% in Sportsbook. DraftKings already posts gross profit margins of 76% over the trailing twelve months.
DraftKings also recently received approval from the Arkansas Racing Commission for online sports betting, making Arkansas its 30th regulated U.S. state. The company also launched its sportsbook in Puerto Rico.
CEO Jason Robins drew a public line at Investor Day, stating the company will not offer bets on geopolitical deaths or wars. The stance limits some addressable market but reduces regulatory and PR risk.
Analyst Ratings and Insider Activity
Analyst coverage is broadly positive, though price targets vary. Canaccord Genuity holds a Buy with a $44 target. Citizens reiterated Market Outperform at $38, while flagging that revenue growth could slow in 2026 and 2027. JPMorgan holds an Overweight rating but cut its target to $32 in February.
The consensus across 31 analysts sits at “Moderate Buy” with a price target of $37.12.
Director Harry Sloan made a notable move in February, purchasing 100,000 DKNG at $21.85 per share — a total outlay of approximately $2.19 million. That lifted his stake by nearly 40%, bringing his total holding to 350,219 shares.
Insiders collectively own 47.08% of the company. That is a high level of insider ownership for a company of this size.
On the institutional side, several new positions were opened in Q4, including Compound Planning and Evansbrook, each adding stakes worth around $2 million. Institutional investors hold 37.70% of the stock overall.
DKNG currently trades near its one-year low of $21.01, well off its 52-week high of $48.78. The stock has a market cap of $11.76 billion and a beta of 1.67.
