DraftKings (NASDAQ:DKNG) Shares Down 7.7% – Here’s What Happened

DraftKings Inc. (NASDAQ:DKNG) shares were down 7.7% on Friday . The stock traded as low as $32.80 and last traded at $32.7250. Approximately 7,287,889 shares traded hands during mid-day trading, a decline of 27% from the average daily volume of 9,978,948 shares. The stock had previously closed at $35.46.

Key DraftKings News

Here are the key news stories impacting DraftKings this week:

• Positive Sentiment: Wells Fargo upgraded DraftKings to “overweight” and raised its price target to $49 from $31, signaling a materially higher upside from prior levels. DraftKing Stock Pops After Upgrade, Price-Target Hike
• Positive Sentiment: Truist Financial issued a “buy” on DKNG, adding to the wave of dealer optimism entering earnings season. DraftKings (DKNG) Receives a Buy from Truist Financial
• Positive Sentiment: Canaccord Genuity reiterated its “buy” stance on DraftKings, reinforcing consensus analyst support. Canaccord Genuity Remains a Buy on DraftKings (DKNG)
• Positive Sentiment: Additional analyst commentary and target hikes pushed near-term bullish sentiment (coverage notes flagged DraftKings as a favorable play into earnings and on product/market progress). DraftKings climbs on this analyst comment; new data-center play gets target hike
• Neutral Sentiment: Some market wrapups bundled DraftKings with other analyst moves (e.g., a broader morning of upgrades and initiations), which may amplify short-term volatility rather than change fundamentals. Nvidia initiated, DraftKings upgraded: Wall Street’s top analyst calls
• Negative Sentiment: Underlying fundamentals remain a concern: DraftKings missed Q3 estimates (reported Nov. 7) with a negative EPS and revenue below expectations, which weakens the near-term outlook despite upgrades.
• Negative Sentiment: Valuation and balance-sheet metrics (negative trailing EPS, negative net margin, and elevated debt-to-equity ~2.5) leave the stock sensitive to macro/earnings shocks and make analyst optimism a potential catalyst for short-covering rather than durable re-rating.

Wall Street Analyst Weigh In

A number of research firms have commented on DKNG. Northland Capmk upgraded shares of DraftKings from a “strong sell” rating to a “hold” rating in a research report on Monday, November 10th. UBS Group reiterated a “buy” rating on shares of DraftKings in a research note on Wednesday, January 7th. Macquarie decreased their price target on DraftKings from $50.00 to $48.00 and set an “outperform” rating on the stock in a research report on Monday, November 10th. Mizuho decreased their target price on DraftKings from $54.00 to $46.00 and set an “outperform” rating on the stock in a report on Thursday, November 13th. Finally, Weiss Ratings reiterated a “sell (d-)” rating on shares of DraftKings in a research report on Wednesday, October 8th. Twenty-five equities research analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, DraftKings presently has a consensus rating of “Moderate Buy” and an average price target of $47.10.

DraftKings Trading Down 8.0%

The business’s 50 day simple moving average is $33.43 and its 200-day simple moving average is $38.28. The company has a debt-to-equity ratio of 2.51, a current ratio of 1.10 and a quick ratio of 1.09. The stock has a market capitalization of $16.24 billion, a P/E ratio of -57.23, a PEG ratio of 0.66 and a beta of 1.63.

DraftKings (NASDAQ:DKNG) last posted its quarterly earnings results on Friday, November 7th. The company reported ($0.26) earnings per share for the quarter, missing analysts’ consensus estimates of $0.01 by ($0.27). DraftKings had a negative net margin of 4.90% and a negative return on equity of 22.84%. The company had revenue of $1.14 billion during the quarter, compared to analyst estimates of $1.40 billion. During the same period last year, the company earned ($0.60) EPS. The business’s revenue for the quarter was up 4.4% compared to the same quarter last year. As a group, analysts forecast that DraftKings Inc. will post 0.64 EPS for the current year.

Insider Buying and Selling

In related news, insider R Stanton Dodge sold 52,777 shares of DraftKings stock in a transaction that occurred on Monday, December 1st. The shares were sold at an average price of $33.84, for a total transaction of $1,785,973.68. Following the transaction, the insider owned 512,182 shares of the company’s stock, valued at $17,332,238.88. This trade represents a 9.34% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this link. Also, Director Harry Sloan bought 25,000 shares of the stock in a transaction on Tuesday, November 11th. The stock was purchased at an average cost of $30.30 per share, with a total value of $757,500.00. Following the purchase, the director directly owned 249,712 shares of the company’s stock, valued at approximately $7,566,273.60. This represents a 11.13% increase in their position. The disclosure for this purchase is available in the SEC filing. Insiders have sold a total of 113,975 shares of company stock worth $3,562,653 in the last ninety days. 51.19% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On DraftKings

Several institutional investors and hedge funds have recently made changes to their positions in DKNG. Viking Global Investors LP bought a new position in DraftKings during the third quarter worth about $561,125,000. Norges Bank acquired a new stake in shares of DraftKings during the second quarter worth about $362,554,000. AQR Capital Management LLC lifted its holdings in shares of DraftKings by 63.5% during the 3rd quarter. AQR Capital Management LLC now owns 11,685,672 shares of the company’s stock valued at $437,044,000 after purchasing an additional 4,538,007 shares in the last quarter. Brown Advisory Inc. lifted its holdings in shares of DraftKings by 53,272.1% during the 2nd quarter. Brown Advisory Inc. now owns 4,056,280 shares of the company’s stock valued at $173,974,000 after purchasing an additional 4,048,680 shares in the last quarter. Finally, Eminence Capital LP grew its position in shares of DraftKings by 31.9% in the 3rd quarter. Eminence Capital LP now owns 6,274,863 shares of the company’s stock valued at $234,680,000 after purchasing an additional 1,517,413 shares during the period. Institutional investors and hedge funds own 37.70% of the company’s stock.

DraftKings Company Profile

DraftKings Inc is a leading digital sports entertainment and gaming company specializing in daily fantasy sports, sports betting and iGaming products. The company provides an integrated platform where users can participate in daily fantasy contests, place wagers on professional sports events, and enjoy a range of online casino-style games. DraftKings’ proprietary technology supports real-time odds, live scoring and advanced analytics to enhance the user experience across mobile and desktop applications.

Founded in 2012 by co-founders Jason Robins, Matthew Kalish and Paul Liberman, DraftKings began as a daily fantasy sports provider and rapidly expanded into regulated sports betting following legislative changes in the United States.