Has Buying DraftKings Stock’s Dips Paid Off?
DraftKings (DKNG) stock has dropped 20% since its high on September 14, 2026. A decline of this speed often prompts investors to reconsider their positions, yet no new financial results triggered the selloff. The company last reported earnings on August 6, 2026, and held its call the next day. At the time, executives noted that near-term profit faced pressure from favorable outcomes for bettors and heavier spending to acquire new customers. So what happened to investors who bought DraftKings after its earlier drops of this size?
DraftKings Buyers Came Out Ahead Six Times In Ten
DraftKings stock has experienced 13 drops of 20% or more since 2019. Ten of those declines occurred over a year ago, and six of those ten resulted in the stock trading higher twelve months later. Investors saw a median gain of 32% across the ten completed cycles. The spread around that median remained wide, ranging from a loss of 74% to a gain of 542%. The two most recent qualifying drops in March and October 2025 both ended their year lower. The other three drops are less than a year old, making it too early to judge their outcomes.
Buyers often had to sit through further selling. In the median case, the stock fell another 19% after the initial drop. Following six of the 13 events, shares fell a further 20% or more. The stock eventually produced a median best gain of 78% in the following year. However, reaching that peak required patience, taking a median of 174 days, or nearly six months.
| Period | Past Median Return |
|---|---|
| 1M | 1.4% |
| 3M | 3.1% |
| 6M | 6.0% |
| 12M | 32.4% |
| 30 Trading-Day Dip | DKNG Subsequent Performance | |||||||
|---|---|---|---|---|---|---|---|---|
| Date | DKNG | SPY | 1Y | Peak Return |
Max Drop |
# Days to Peak |
||
| Median | 32% | 78% | -19% | 174 | ||||
| 9/29/2026 | -23% | -1% | -5% | 9 | ||||
| 7/24/2026 | -20% | 2% | -19% | 28 | ||||
| 1/30/2026 | -20% | 2% | -32% | 132 | ||||
| 10/1/2025 | -22% | 5% | -46% | 3% | -46% | 96 | ||
| 3/28/2025 | -24% | -9% | -34% | 37% | -41% | 153 | ||
| 8/2/2024 | -26% | -2% | 41% | 67% | -7% | 196 | ||
| 12/15/2022 | -21% | 4% | 179% | 209% | -14% | 351 | ||
| 9/26/2022 | -29% | -14% | 99% | 122% | -25% | 305 | ||
| 10/15/2021 | -21% | -1% | -73% | 2% | -79% | 5 | ||
| 5/3/2021 | -21% | 7% | -74% | 12% | -76% | 129 | ||
| 10/28/2020 | -25% | -3% | 24% | 89% | -7% | 142 | ||
| 7/13/2020 | -26% | 4% | 62% | 144% | 0% | 249 | ||
| 3/12/2020 | -23% | -24% | 542% | 542% | 0% | 365 | ||
DraftKings Is Growing More Slowly, And Its Loss Has Widened Again This Year
DraftKings grew revenue 15% over the last twelve months, marking a steady deceleration from previous periods. The company posted 26% revenue growth in the year prior to that, and 43% two years ago. While the company still reports a loss, that deficit has narrowed in each consecutive year. The operating loss accounted for 2.9% of revenue over the last twelve months, improving from 6.2% a year ago and 11.7% two years ago. However, that loss has widened since the end of 2025, and second-quarter revenue fell 4.6% from a year earlier. The core business is also generating cash, with operating cash flow at 10.8% of revenue over the same twelve-month period.
DraftKings lacks a meaningful P/E because its earnings remain negative. When evaluated on cash generation, however, the stock trades at 14.7 times operating cash flow as of October 8, 2026. This metric aligns closely with the S&P 500 average of 14.4, meaning investors are paying roughly the broader market price for the company’s cash flow.
DraftKings Has Yet To Prove A New Predictions Product
DraftKings recently launched a product called Predictions, and executives noted on the August 7 call that the product is growing faster than expected. The company reported that annualized total volume traded grew from $2.3 billion to $11 billion between April and July. Despite the strong volume, management cautioned that a Predictions customer will bring in less revenue than a traditional Sportsbook customer. They expect the new business’s higher margins to support a similar gross profit per customer over time. Regulatory questions make the future “not entirely certain”, and DraftKings is investing in Predictions cautiously partly for that reason. Even with this Predictions spending included, the company kept its 2026 adjusted EBITDA guide at $700 million to $900 million.
History shows that buying these past drops paid off a little more often than not, with the stock higher a year later in six of ten cases. For this current drop to end like those successful cases, DraftKings must get its loss narrowing again while the regulatory framework for Predictions gets settled. Is a DraftKings with slower sales growth, a loss that has widened this year, and an unproven new product still a company whose dips pay?
Does This Mean You Should Act On DKNG?
Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.
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