TLDR DraftKings shares fell 21.3% on Friday to a new 52-week low after a guidance cut. The company expects $900 million to $1.05 billion in prediction market losses through 2027. JPMorgan, UBS and Stifel all downgraded the stock and lowered price targets. DraftKings added about 1 million prediction market customers in three months. CEO Jason Robins says the company wins no matter how future court rulings go.
DraftKings plans to spend heavily on its prediction markets business through 2027, and Wall Street is now debating whether that bet will pay off. Three major banks downgraded the stock after the company released its third-quarter results.
The shares fell 21.3% on Friday to a new 52-week low. The drop came after DraftKings cut its 2026 outlook and disclosed the expected losses tied to prediction markets.
The company said the business could generate between $900 million and $1.05 billion in combined adjusted EBITDA losses through 2027. That figure is now the main point of debate among analysts.
DraftKings downgraded by JPMorgan, UBS and Stifel as prediction market losses weigh https://t.co/4uqScTy5Q6
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The Price of Growing Prediction Markets
DraftKings lowered its 2026 core revenue guidance to $6.35 billion to $6.55 billion. Its earlier forecast was $6.5 billion to $6.9 billion.
The company also cut its adjusted EBITDA forecast to $175 million to $275 million, down from $700 million to $900 million. Chief Executive Officer Jason Robins said about 60% of a roughly $100 million cut in core adjusted EBITDA guidance came from unfavorable sports results. The rest was linked to higher spending to win online casino customers.
DraftKings added about 1 million prediction market customers in three months. More than 1.6 million people have used the product this year, and management said retention