How Much Downside Is Left In DraftKings Stock?

For questions about this article or underlying research, email help@trefis.com.

DraftKings (DKNG) stock fell 21% on November 6, 2026, after the company cut its 2026 outlook and said it would spend more building its predictions business. At $19.36 on November 10, the shares were 46.6% below their highest close of the past year. So with the shares already down that far, how much further have market sell-offs pushed DraftKings before, and how long did it take to come back? That record can’t show where this fall will stop, since this one came from the company’s own outlook cut rather than a market-wide sell-off.

DraftKings Usually Falls Further Than The S&P 500

In the six market shocks DraftKings has traded through, the stock fell 28.7% on average, against 17.1% for the S&P 500 over the same windows. Its hardest hit came in the 2022 inflation shock and Fed tightening, when it fell 63% while the index fell 25%. In the 2025 US tariff shock it fell 38%, twice the S&P 500’s 19%.

Recoveries have taken anywhere from about a week to more than a year. From its lowest close, DraftKings needed a median of 1.2 months to regain its earlier peak close, but the stock took 14 months to recover after the 2022 fall. The shares have still not returned to the peak close set on February 19, 2025, the first day of the tariff shock.

DraftKings Is Losing More Money Than A Year Ago

DraftKings posted a $493 million operating loss in the third quarter of fiscal 2026, which ended September 30, compared with a $272 million loss a year earlier. This came even as revenue rose 16.2% to $1.33 billion. Over the past twelve months, the operating loss equaled 6.3% of revenue, up from 5.6% a year earlier. The loss is still far narrower than in the twelve months to September 2022, when it was 88.7% of revenue.

DraftKings also carries more debt than a year ago. Total debt climbed to $2.28 billion at the end of September, up from $1.91 billion a year earlier. That debt equals 23.7% of the company’s market value, compared with 19.0% for the S&P 500.

Management Is Stepping Up Spending On Prediction Markets

On the November 6 call, management said it had raised its 2026 spending on its predictions business to $650 million to $700 million, counted as a cost in adjusted EBITDA, the company’s own profit measure. Third-quarter adjusted EBITDA was negative $317 million, which management said mainly reflected that spending. The company also lowered its 2026 revenue forecast to $6.35 billion to $6.55 billion, from $6.5 billion to $6.9 billion in August.

Management expects less from the established business, too. In August, the company said the core business was on track for about $1 billion of adjusted EBITDA in 2026. It now expects $875 million to $925 million, citing more spending to grow iGaming and sports results that modestly favored customers. Including the predictions spending, management now expects company-wide adjusted EBITDA of $175 million to $275 million for 2026, down from $700 million to $900 million.

DraftKings is waiting on a court ruling over its sports prediction contracts. Management’s base case, given on the same call, is a Supreme Court ruling in mid-2028, and it said it will adjust its predictions spending as regulation develops. DraftKings is expected to report next in February 2027, and its spending on predictions, guided at $175 million to $225 million for the fourth quarter, is the number to watch.

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.

There is a smarter approach. Since its inception, the Trefis High Quality (HQ) Portfolio has returned 105%, beating the benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. And it did so without taking the concentrated risk that comes with do-it-yourself stock picking. If that is how you want to invest, the HQ Portfolio is the place to start.

Spot an error or want more like this? Tell us in 10 seconds.