DraftKings Stock Lost 12.3% Last Month. Could Thursday's Earnings Help Turn Things Around?
DraftKings' upcoming third-quarter earnings report could serve as a key catalyst for the declining gaming stock, provided the company continues its pattern of beating estimates and raising guidance.
October’s Tough Stretch
October proved challenging for DraftKings (DKNG +1.67%), as shares dropped 12.32%. By Halloween, the closing price hit $30.59 — the lowest level since August 2024. This sharp decline raised concerns among investors.
Possible Causes Behind the Drop
A main source of pressure came from heavy trading activity in prediction markets like Kalshi. Investors saw the rise of these sports event derivative contracts as a potential threat to DraftKings’ core offerings, leading to a negative reaction in the stock.
Sports Outcomes Added Pressure
Another major factor in the company’s weak third-quarter performance was a series of favorable NFL game outcomes for bettors. September, a crucial month for sportsbooks, saw the “house” take notable losses, prompting some analysts to cut their Q3 estimates.
Outlook Ahead
“The bad news, particularly the struggles over the first month of the NFL season, is arguably baked into DraftKings shares at this point.”
With Thursday’s earnings announcement on the horizon, investors hope for signs of stabilization. If positive, it could lay the groundwork for a rebound — though recovery is not guaranteed.
Author’s Summary
DraftKings faced tough market headwinds from prediction market growth and unlucky NFL outcomes, but its Q3 report may determine whether a rebound is within reach.