DraftKings Dips Have Usually Paid, But Does This Drop Count?
DraftKings (DKNG) trades near $22.50, about 14% below the recent high it set on 21st August 2026. Sharp falls in this stock have been worth buying before: the median dip gained 41% over the next twelve months. The same record says the wait was long, and this fall is not the kind it is built on. Consider what those falls paid.
What Has Buying DraftKings On The Way Down Paid?
Since 2019, DraftKings has fallen 20% or more inside 30 trading days on 12 separate occasions. Nine are old enough to have a full year behind them, and six of those nine ended higher. The median twelve-month return across them was 41%.
That gain was not free. After the typical dip, the stock fell a further 14% at its worst, measured over the nine dips with a full year behind them. Across all twelve, the median further fall is about 20%, and 6 of the 12 fell more than 20% further. Two of those six never came back: one rose just 2% above the dip and ended the year down 73%, another rose 12% and ended down 74%. The stock took a median of about 196 calendar days, a little over six months, to reach its best level. 6 of 9 is a good record, not a guarantee. The waiting is what buyers underestimate. The tables below lay out the individual dips and what followed each one.
DKNG had 12 events since 7/25/2019 where the dip threshold of -20% within 30 days was triggered
- 78% median peak return within 1 year of dip event
- 196 days is the median time to peak return after a dip event
- -14% median max drawdown within 1 year of dip event
| Period | Past Median Return |
|---|---|
| 1M | 0.9% |
| 3M | 6.7% |
| 6M | 13.3% |
| 12M | 41.2% |
| 30 Day Dip | DKNG Subsequent Performance | |||||||
|---|---|---|---|---|---|---|---|---|
| Date | DKNG | SPY | 1Y | Peak Return |
Max Drop |
# Days to Peak |
||
| Median | 41% | 78% | -14% | 196 | ||||
| 7242026 | -20% | 2% | -5% | 28 | ||||
| 1302026 | -20% | 2% | -25% | 132 | ||||
| 10012025 | -22% | 5% | 3% | -41% | 96 | |||
| 3282025 | -24% | -9% | -34% | 37% | -41% | 153 | ||
| 8022024 | -26% | -2% | 41% | 67% | -7% | 196 | ||
| 12152022 | -21% | 4% | 179% | 209% | -14% | 351 | ||
| 9262022 | -29% | -14% | 99% | 122% | -25% | 305 | ||
| 10152021 | -21% | -1% | -73% | 2% | -79% | 5 | ||
| 5032021 | -21% | 7% | -74% | 12% | -76% | 129 | ||
| 10282020 | -25% | -3% | 24% | 89% | -7% | 142 | ||
| 7132020 | -26% | 4% | 62% | 144% | 0% | 249 | ||
| 3122020 | -23% | -24% | 542% | 542% | 0% | 365 | ||
[2] Analysis for period from 7/25/2019 to 9/17/2026
Would You Still Want To Own This Business?
A record of bouncing back only counts if the business is sound, and DraftKings clears the basic tests. Revenue over the trailing twelve months is $6.22 billion, up 15.0%, and the company turns 10.8% of it into operating cash flow. Growth is slowing from its recent trend, though.
The complication is what DraftKings does with that cash. Management points to roughly $1 billion of adjusted EBITDA from the core in fiscal 2026, before the incremental $200 million to $300 million going into Predictions. The company held its fiscal 2026 guidance ranges rather than raise them. Company-wide adjusted EBITDA is guided to $700 million to $900 million for fiscal 2026, smaller than the core alone, by choice.
| Quality Metrics | Value | Quality Check |
|---|---|---|
| Revenue Growth (LTM) | 15.0% | Pass |
| Revenue Growth (3-Yr Avg) | 28.0% | Pass |
| Operating Cash Flow Margin (LTM) | 10.8% | Pass |
Is DraftKings Worth The Wait Right Now?
The case for stepping in starts with the core. Sportsbook handle rose 11% year over year in the second quarter of 2026. DraftKings also owns the brokerage, exchange and market maker layers of its Predictions stack, and launched its own exchange, DKeX, in June 2026.
The case against starts with the size of the fall. That record is built on drops of 20% or more inside 30 trading days, and this pullback of about 14% does not qualify. The record describes falls harder than this one. And the 14% is only the last leg: DraftKings is down about 48% over the trailing twelve months.
The second worry is the payoff. By early August 2026, more than 600,000 customers had engaged with Predictions, and management says it is still learning what those customers are ultimately worth. The next real evidence is the report expected around 4th November 2026. Watch whether the core still tracks roughly $1 billion of adjusted EBITDA once Predictions spending is set aside.
So What Do You Do About DraftKings Now?
This one is genuinely hard to call: the record leans one way, the size of the fall the other. Step in only if you would still want DraftKings after another leg down. The hard part is holding through the red while you find out whether you were early or wrong.
There are two better moves than guessing. One is to stop judging this fall alone, which is what our Buy The Dip screen is for. The other is to stop making the call stock by stock, which is the idea behind the Trefis High Quality Portfolio. That portfolio has a track record of outpacing the three major indices.