TLDR

  • DraftKings reports Q4 earnings Thursday with analysts projecting $0.09 EPS and $1.99 billion revenue, both up year-over-year

  • Shares hit two-year low of $25.01 last week, trading at $26.28 after 3% drop Wednesday, down 23.8% in 2026

  • Company launched DraftKings Predictions to counter prediction market threat and access states without legal sports betting

  • Wall Street analysts now say prediction market fears overblown, estimating only 5% impact on legal betting handle

  • Technical indicators show oversold RSI at 27.7 while 7.8% short interest could fuel post-earnings rally

DraftKings delivers its fourth-quarter earnings report Thursday after the closing bell. Wall Street expects earnings per share of $0.09 on revenue of $1.99 billion.

Zacks Research projects higher earnings of 50 cents per share on the same revenue figure. Both estimates exceed last year’s Q4 results.

The stock closed down 3% Wednesday at $26.28. Year-to-date, shares have plunged 23.8%.

Stock Performance and Technical Setup

DraftKings touched a two-year low of $25.01 on Feb. 5. The stock has failed multiple attempts to break through resistance at $37.50.

Technical indicators paint an interesting picture. The 14-day RSI reads 27.7, signaling oversold conditions. Historically, readings below 30 often precede rebounds.

Short interest represents 7.8% of the float. That’s nearly three days of potential buying pressure if shorts scramble to cover on positive earnings news.

Options markets expect a 15.9% move after earnings. This dwarfs the stock’s typical 5.3% post-earnings swing. The company has closed higher in five of its last eight earnings sessions, including an 8.6% jump in November.

Prediction Markets Enter the Picture

Three months ago, CEO Jason Robins declared himself “the most bullish” about DraftKings’ future. The stock is down 6% since.

Prediction markets emerged as a concern for investors. These platforms let users bet in states without legalized sports betting, potentially cutting into DraftKings’ growth.

DraftKings responded by launching DraftKings Predictions. The platform serves defensive and offensive purposes. It protects market share while giving the company access to restricted states.

The move also builds a customer database. If those states legalize sports betting later, DraftKings already has users to convert.

Wall Street Reconsiders the Threat

Analysts are walking back their prediction market concerns. Third Bridge’s Alex Smith doesn’t expect DraftKings to fully commit to the space. Regulatory uncertainty and unproven demand outside sports remain issues.

Sports betting drives 89% of Kalshi’s fee revenue in 2025. Kalshi and Polymarket dominate the prediction market landscape.

Citizens analyst Jordan Bender downplayed the competitive threat in January. His research suggests prediction markets capture roughly 5% of total legal sports betting handle.

Bender noted one poor Monday Night Football game could match the EBITDA impact of the entire prediction market sector. The comparison highlights how much investors may have overreacted.

Thursday’s earnings call will shed light on DraftKings Predictions performance. Management’s commentary will reveal whether the company views prediction markets as a real threat or minor distraction.

The stock’s oversold condition and high short interest create potential for a sharp move if results beat expectations. Analysts will focus on revenue growth, user metrics, and any updated guidance for 2026.

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