Multiple Wall Street analysts raised their price targets on DraftKings after its record-setting second quarter, pointing to structural hold gains and frugal promotional spending heading into NFL season.
DraftKings closed the second quarter with $1.5 billion in total revenue, $158.3 million in net income, and $301 million in adjusted EBITDA. Sportsbook revenue jumped 45% year-over-year to $998 million, fueled by a record net revenue margin.
Results were not strong enough to lift full-year guidance, however, suggesting a more moderate second half as recent margin gains normalize.
Despite the strong results, DraftKings’ stock remains down from its pre-earnings price, opening Monday at $42.81.
DraftKings on pace for solid H2
Barry Jonas of Truist lifted his target to $60 from $56 and kept his buy rating.
He highlighted DraftKings’ 8.7% sportsbook net revenue margin, well above expectations, and said structural hold trends and tighter promotional spending “are setting it up well” for the rest of the year.
“The hold pendulum swung back to favorable in Q2 as DKNG beat our/Street [estimates] handily,” Jonas noted, referencing the historically unfavorable last six months of sports results across the industry.
Guidance could be conservative
Jordan Bender of Citizens called the company’s full-year outlook “likely conservative,” adding that in-line sports results could push DraftKings past its 2025 estimates despite a slowdown in handle growth.
Bender raised his target to $59 from $55, reiterating his buy rating. He pointed to gross margin expansion to 48% and reduced promotional intensity as positive signs.
Carlo Santarelli of Deutsche Bank lifted his target to $45 from $43 while maintaining his hold rating. While he noted handle growth slowed to 6% year-over-year, Santarelli said that was “more than offset” by margin gains and lower promotional spending.
He called Q2 “a solid quarter across the board” that sets “a higher base” for 2026.
Live betting, parlays as ‘key drivers’
David Katz of Jefferies increased his target to $60 from $54 while maintaining a “buy” rating. He pointed to DraftKings’ live betting handle rising 16% year-over-year, more than double the company’s overall handle growth in Q2, as a key driver of engagement and margin expansion.
Parlay mix also accelerated, helping push structural hold higher, which combined with continued growth in live betting should “persist as tailwinds” even if Q2’s favorable sports results normalize, Katz said. He added that DraftKings’ promotional discipline, down roughly 6 percentage points as a share of gross gaming revenue, and its ability to generate consistent free cash flow put it “in position to maintain leadership” as the market matures.
Chad Beynon of Macquarie raised his target to $62 from $56 to and reiterated DraftKings as his “top pick” in the online sports betting market. He also cited a long runway for structural hold gains, handle market share growth, and what he called a “best-in-class” live betting offering as reasons for optimism.
Sustained hold in the 10% range, Beynon wrote, could deliver “strong top- and bottom-line outperformance” beyond current estimates.
