DraftKings falls 21.3% after weaker quarter and lower 2026 revenue guide

What happened

DraftKings (DKNG) fell 21.3% on November 6, 2026, after third-quarter results and a cut to full-year revenue guidance tied to heavy investment in its Predictions business. Management reported third-quarter revenue growth alongside a wider loss and a revenue shortfall versus some estimates, and narrowed full-year 2026 revenue guidance to $6.35 billion to $6.55 billion from $6.5 billion to $6.9 billion. The company said it would increase investment in its Predictions/prediction markets business, estimating spending of about $650 million to $700 million, largely to acquire new customers. Business Wire and Zacks Investment Research reported the results and guidance change; PRNewsWire said plaintiff firm Levi & Korsinsky notified investors of a pending investigation into the disclosure.

How big was the move

The stock closed at $18.51 after the session in which it fell 21.3%. Trading volume ran 5.7 times its 20-day average, and the move measured 4.9 times a typical daily move for this stock. Over the past five sessions the shares fell 11.5% while the S&P 500 over five sessions fell 2.7%; on the day the S&P 500 rose 0.3% and the Consumer Cyclical sector median fell 1.3%, leaving DraftKings 20.0 percentage points worse than the sector median. The company’s market value was $10.38 billion at the close. Because earnings were released at this session, the reported results were the direct cause of the price move.

The technical picture

The stock opened 26.3% below the previous close and finished 49.9% below the 52-week high. It was 10.1% below its 20-day moving average and 13.9% below its 50-day moving average; the 50-day average is below the 200-day average, a sign of a weak longer-term trend. The share price was 22.8% below its 200-day moving average and the 14-day Relative Strength Index stood at 38, in the neutral range between 30 and 70. Over one month the stock fell 6.8%; over three months it fell 23.7%; over one year it fell 33.7%, trailing the S&P 500 by 42.2 percentage points over the year. Volatility was 70% annualized over 60 days, higher than 80% of its own readings over five years, underscoring heightened price swings around the earnings release.

Fundamentals and valuation

For the four quarters through September 30, 2026, DraftKings reported revenue of $6.41 billion, which grew 17.4% from a year earlier and compared with revenue growth of 15.0% one quarter earlier. Gross margin was 40.5%, up from 39.2% a year earlier, and operating margin was 6.3%, versus 5.6% a year earlier. Diluted earnings per share for the period were $-0.78 and free-cash-flow margin was 5.1%. Return on invested capital was 6.7% and the balance sheet showed net cash of $69.1 million. Share count over one year decreased by 6.2%. On valuation, free-cash-flow yield was 3.1%.

PromtFinance sector-ranked scores show Growth 91 (Exceptional) but Value 10 (Very weak), Quality 21 (Very weak), Momentum 11 (Very weak) and Stability 15 (Very weak). Those readings reflect strong top-line growth and investment into new products, offset by weak profitability, momentum and stability metrics that help explain the market’s sensitivity to the guidance revision.

Earnings and analyst expectations

DraftKings reported on November 5, 2026, earnings per share of $-0.53 against $-0.41 expected, 29.2% below estimates. The company has recorded zero consecutive quarters beating estimates and the average surprise over the last four reports was 100.0% below estimates. Typical two-day reactions after recent reports have been muted relative to this session, with the typical two-day reaction noted as rose 1.1%. Analysts covering the stock total 48, with a consensus rating of Buy and 75% of ratings at Buy or Strong Buy. The consensus price target stands at $32.33, which is 74.7% above the closing price on November 6, 2026.

What to watch

• February 11, 2027: next scheduled earnings report
• Management’s execution and spending on Predictions, estimated at about $650 million to $700 million for 2026
• The revised full-year revenue guidance of $6.35 billion to $6.55 billion for 2026
• Ongoing reporting and any regulatory or legal developments related to the November 6, 2026, disclosure
• Changes in trading volume relative to 5.7 times its 20-day average and any follow-through price action