Haverhill Financial Research · October 12, 2026
Summary: Haverhill price target $21 (12 months)
DraftKings is spending heavily to win prediction markets while its sportsbook and online casino keep growing underneath. Second-quarter revenue fell 5% to $1.44 billion as customer-friendly results and Predictions promotions cut margins, and adjusted EBITDA dropped to $115 million from $301 million. At $19.58 the shares trade at about 13 times the midpoint of 2026 EBITDA guidance including net debt, which already reflects much of that pressure. Our 12-month price target of $21 (through October 2027) sits about 7% above the current price, so we rate the shares Hold.
Company filings through the Q2 2026 Form 10-Q; Haverhill Financial Research model; price as of Nasdaq close Oct 9, 2026
The core is still growing. Sports volume rose 15% and iGaming revenue 7.5% in Q2, and management says the core business is on track for about $1 billion of adjusted EBITDA in 2026.
Predictions is the new cost. DraftKings reports more than 600,000 Predictions customers this year, but promotions to win them, plus customer-friendly results, cut Q2 sports margin to 6.8% from 8.7%.
Our view: the price already assumes a lot of bad news, but until DraftKings shows what Predictions earns and states stop raising taxes, we see limited upside.
