DraftKings Stock Lost 12.3% Last Month. Could Thursday's Earnings Help Turn Things Around?
DraftKings' third-quarter earnings update could provide a crucial boost for the struggling gaming stock. However, the company must maintain its pattern of surpassing expectations and raising forecasts to restore investor confidence.
October proved to be a difficult month for DraftKings (DKNG +0.21%), as the sportsbook operator’s shares fell 12.32%. The stock closed Halloween at $30.59 — its lowest end-of-day price since August 2024.
Reasons Behind the Drop
Several factors contributed to the decline in value. Investors reacted negatively to the surge in activity on prediction markets such as Kalshi, viewing these new derivatives on sports events as potential competition to DraftKings’ offerings.
At the same time, the company faced challenges related to its third-quarter margins and profitability. Favorable NFL outcomes for bettors meant the “house” didn’t always win — and September, the most crucial month for sportsbooks in Q3, proved particularly costly. These losses led some analysts to lower their quarterly profit estimates.
Looking Ahead
The disappointing start to the NFL season may already be reflected in DraftKings’ current share price. As a result, the company’s upcoming earnings report, set for release on Thursday, might provide a foundation for a recovery — though that outcome is far from guaranteed.
“It’s possible the company’s third-quarter earnings update could act as the foundation for a rebound. It’s possible, but not promised.”
Author’s Summary
DraftKings’ stock drop in October reflects short-term headwinds and competitive pressures, but the upcoming earnings report could offer a chance for renewed investor optimism.