TLDR
- DraftKings stock rose 9.31% last week after reporting Q4 revenue of $1.99 billion and swinging to a net profit of $136.43 million.
- The company’s Predictions feature now operates in 38 states, including California and Texas, which are off-limits to its core sportsbook.
- 2026 revenue guidance of $6.5B–$6.9B came in below analyst expectations of ~$7.3B, but Predictions revenue was excluded entirely.
- Jefferies reiterated a Buy rating with a $46 price target; Morgan Stanley also held a positive stance.
- CEO Jason Robins has projected Predictions could eventually generate up to $10 billion in gross revenue.
DraftKings has had a rough stretch. Despite posting 43% revenue growth, the stock sold off hard after the company issued 2026 guidance that disappointed Wall Street. But the past week told a different story.
DKNG climbed 9.31% as investors warmed to a combination of strong earnings, analyst support, and strategic moves that suggest the company’s growth story isn’t finished.
In Q4 2025, DraftKings reported revenue of $1.99 billion, up from $1.39 billion in the same period a year earlier. More importantly, it swung from a GAAP net loss to a net profit of $136.43 million.
That profitability milestone matters in an industry where many operators are still burning through cash. It signals that DraftKings is starting to show real operating leverage.
Jefferies reiterated its Buy rating with a $46 price target following the results. Morgan Stanley also maintained a positive outlook. Insider activity added to the bullish tone — director Harry Sloan made a $2.2 million stock purchase recently.
The company also received approval from the Arkansas Racing Commission to launch its online sportsbook in the state. That brings DraftKings‘ sports betting footprint to 30 U.S. states plus Washington D.C., Ontario, and Puerto Rico — covering more than half the U.S. population.
Prediction Markets: The Wild Card
The bigger story may be what’s not in the guidance. DraftKings excluded its Predictions feature from its 2026 revenue forecast of $6.5B–$6.9B, meaning any revenue it generates is pure upside.
Predictions currently operates in 38 states — including California and Texas, where online sports betting is still prohibited. That’s roughly 40% of the U.S. population that DraftKings couldn’t reach through its core product.
In February 2026, the company announced a partnership with Crypto.com and integrated Railbird Exchange — a designated contract market it acquired — to expand offerings into culture, entertainment, politics, and player-specific sports markets.
CEO Jason Robins called Predictions “the most exciting new growth opportunity we have seen since PASPA was struck down in 2018.” He has projected the segment could eventually hit $10 billion in gross revenue.
Built-In Edge
What sets DraftKings apart from newer prediction platforms like Polymarket or Kalshi is infrastructure. The company already runs a market-making operation to power its live sportsbook odds, with hundreds of data scientists and a dedicated trading desk.
That same infrastructure is now being redirected to provide liquidity across prediction market contracts — an advantage a startup exchange simply can’t replicate overnight.
The 2026 guidance miss — $6.5B–$6.9B versus analyst expectations around $7.3B — is a real concern. J.P. Morgan warned investors may view the lowered target as an admission of slowing growth rather than a conservative base to beat.
DraftKings also faces a class action lawsuit in Massachusetts related to a promotional offer, adding a layer of legal uncertainty.
Still, the stock is trading near its 52-week low, and it posted its first quarterly GAAP profit while expanding into new markets and new product categories.
