DraftKings (DKNG) Stock Plunges 35% in 2025 Despite Bullish Analyst Price Targets

Key Highlights

• Shares of DraftKings gained 0.67% in premarket hours Friday, trading at $22.62
• NBA superstar LeBron James reportedly signed a $15 million partnership with Polymarket, leaving DraftKings
• Needham maintains its Buy recommendation with a $35 price objective following management discussions
• The stock has declined 9% in the past five trading sessions and 35% since the start of the year, positioned beneath all major moving averages
• Wall Street forecasts third-quarter sales of $1.42 billion alongside a reduced per-share loss of 16 cents when earnings arrive in November

Shares of the online sports betting company edged 0.67% higher to $22.62 during Friday’s premarket session, though the broader picture remains challenging with a 35% year-to-date decline and a 9% drop in the last week alone.

DraftKings Inc., DKNG

The modest uptick follows reports that basketball icon LeBron James has inked a $15 million agreement to transition from DraftKings to Polymarket, a platform specializing in prediction markets. This development is highlighting a segment that operates parallel to conventional sports wagering rather than competing directly within the same space.

Market observers are monitoring whether user engagement is gradually shifting toward prediction market platforms, although executives at DraftKings have dismissed concerns that emerging competitors pose a significant risk.

Investment firm Needham confirmed its Buy stance and $35 price objective for DKNG following an investor dinner featuring Chief Executive Jason Robins and Chief Financial Officer Alan Ellington. According to the firm, predictive modeling dominated the evening’s discussion.

Company leadership emphasized to attendees that its analytics-based customer acquisition strategy is capturing market share, especially among first-time users. Executives characterized the competitive landscape in mainstream online sports betting as stable throughout the year, arguing that concerns about intensifying competition are exaggerated.

Management outlined growth prospects in iGaming markets including Maryland, Virginia, and Washington D.C., along with online sports betting expansion in Georgia. A Supreme Court ruling regarding predictive modeling is anticipated, though its direction remains unclear.

The company is prioritizing fixed cost reductions as it advances toward generating billions in EBITDA. DraftKings maintains a gross profit margin of 76%, with EBITDA totaling $123 million over the trailing twelve months. Wall Street expects profitability to arrive this year.

Chart Analysis Shows Weakness

Technical indicators paint a bearish picture. DKNG sits 7.8% beneath its 20-day simple moving average, 7.7% under its 50-day SMA, 9.5% below its 100-day SMA, and 14.8% under its 200-day SMA. This configuration suggests any upward moves could encounter resistance swiftly.

The MACD indicator has fallen below its signal line with a negative histogram reading, signaling diminishing bullish momentum. A death cross materialized in October 2025, with the 50-day SMA continuing to trade beneath the 200-day SMA.

Critical resistance is positioned at $27.00, adjacent to the 200-day SMA at $26.49 and the 200-day EMA at $27.06. Downside support emerges at $21.50, marginally above the 52-week floor of $20.46.

Wall Street Outlook and Quarterly Results

Recent analyst commentary has leaned constructive. Wolfe Research initiated coverage with an Outperform rating and $40 price target on September 2. Citizens lifted its objective to $37 on September 8. Bernstein increased its target to $29 on September 3. The Street consensus stands at Buy with a mean price target of $34.14.

The next major event is the anticipated November 5, 2026 earnings release. Analysts project revenue of $1.42 billion, climbing from $1.14 billion in the year-ago period, and a per-share loss of 16 cents, representing an improvement from the prior year’s 26-cent deficit.

Looking at the wider market, prediction market activity reached $3.17 billion on Saturday and $3.12 billion on Sunday during the opening NFL weekend, according to Jefferies data. DraftKings reported a 22% increase in combo volumes to $18.8 billion in August, per Stifel research, which also carries a Buy rating on the stock.

The post DraftKings (DKNG) Stock Plunges 35% in 2025 Despite Bullish Analyst Price Targets appeared first on Blockonomi.