Five-Star Analyst Downgrades DraftKings Stock (DKNG) on Prediction Market Fears

FomoAnxiety · 2026-03-17T17:02:24+00:00

DraftKings' stock has been downgraded by Argus Research due to rising competition from prediction markets and high customer acquisition costs. While revenue has increased year-over-year, analysts remain cautious about long-term earnings and competitive pressures.

FomoAnxiety

2026-03-17 17:02:24

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The stock of sports betting platform DraftKings (DKNG) has been downgraded over fears related to rising competition from prediction markets.

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Argus Research lowered its rating on DKNG stock to Hold from Buy previously, citing elevated customer acquisition costs and increased competitive pressures, notably from prediction markets such as Kalshi and Polymarket that let users bet on seemingly everything, not just sports.

John Eade, a top five-star rated analyst with a 65% success rate, said DraftKings continues to be plagued by high customer acquisition costs, increased state taxes, and aggressive competition from prediction markets. Consequently, Argus lowered its 2026 earnings estimate for DraftKings to $1.20 per share from $2.30 a share previously.

Betting It All

The downgrade from Argus comes analyst said DraftKings is spending heavily on prediction markets and customer acquisition. The firm noted the company has room for longer-term growth.

DraftKings operates online sports betting and daily fantasy sports platforms in the United States.

In other recent news, DraftKings Inc. reported a year-over-year revenue increase of 13.0% despite a 28.5% decline in handle, with an improved hold of 10.7%, up from 6.8% last year. Benchmark reiterated its Buy rating with a $29.00 price target, citing improved monetization across platforms. Similarly, Stifel maintained its Buy rating and $40 price target, highlighting DraftKings’ super app strategy and long-term advantages in pricing and trading capabilities. In another development, Bernstein SocGen Group raised its price target for DraftKings to $30.00, maintaining an Outperform rating, and expects the company’s predictions product to significantly boost marketing spend. Additionally, DraftKings and ESPN announced a new account linking feature ahead of the March Madness tournaments, allowing users to integrate their betting with ESPN’s Tournament Challenge. This feature, called Bet Your Bracket, aims to enhance user engagement with personalized betting suggestions. These developments reflect ongoing strategic initiatives and partnerships aimed at strengthening DraftKings’ market position.

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