DraftKings Stock Price Forecast - DKNG Shares Climbs to $34.95 - Bullish Outlook

NASDAQ:DKNG Surges Toward Q3 Earnings as Prediction Market Push and Parlay Growth Reshape DraftKings’ Path

DraftKings Inc. (NASDAQ:DKNG) closed at $34.70, up 0.72% after hours at $34.95, as investors brace for its Q3 2025 results on November 6, with the earnings call set for the following morning. The company enters the quarter riding strong momentum in revenue and user growth but also facing shifting market sentiment tied to regulatory developments and its new foray into prediction markets through the Polymarket partnership. Market capitalization stands at $17.22 billion, with average trading volume of 16.6 million shares, reflecting active positioning ahead of the results that could define the stock’s next major leg.

Strong Financial Base and Surging Monetization Drive NASDAQ:DKNG Fundamentals

DraftKings’ fundamentals show sharp improvement across all key metrics. For the quarter ended June 2025, revenue hit $1.51 billion, rising 36.95% year over year, while net income surged 147% to $157.9 million. Profitability is improving fast, with net margin at 10.44%, up nearly 81% YoY, and EBITDA of $215.9 million, a fivefold jump. The company’s EPS reached $0.38, climbing 72.7%, confirming that its cost discipline and mix of higher-margin parlay betting are translating directly into earnings. Cash reserves rose to $1.26 billion, giving DraftKings flexibility to fund new initiatives like its prediction platform while maintaining operational stability. Operating expenses rose 19.6% YoY to $1.01 billion, mainly driven by marketing and product expansion across its sportsbook and iGaming operations. Total assets grew to $4.47 billion, while liabilities expanded to $3.46 billion, with equity steady at $1.01 billion, reflecting a balanced structure supported by rising free cash flow of $194.5 million, up 134% from last year.

DraftKings Expands Into Prediction Markets With Polymarket Partnership

A major turning point for NASDAQ:DKNG came with its acquisition of Railbird, a CFTC-regulated prediction market platform, and the announcement of its collaboration with Polymarket, which will serve as the clearinghouse for its new “DraftKings Predictions” mobile app. This app will cover markets spanning finance, entertainment, and culture, positioning DraftKings at the intersection of sports betting and decentralized event markets. The move brings DraftKings directly into a fast-growing arena that recorded over $4.6 billion in trading volume across Polymarket and Kalshi in just the first 23 days of October — a record high. Polymarket, recently valued between $12–15 billion following a $2 billion investment from Intercontinental Exchange, will manage collateral and settlement functions for DraftKings, ensuring regulatory compliance and transparency. This partnership marks DraftKings’ first major crypto-related venture since closing its NFT marketplace in 2024, signaling a return to blockchain integration but this time with a clear utility angle tied to real-money event outcomes.

Prediction Markets Boom Amid Kalshi Rivalry and Legal Crossroads

The timing of DraftKings’ move into prediction markets is strategic. Platforms like Kalshi are gaining traction but face regulatory challenges, including lawsuits from Massachusetts over unlicensed sports betting. By aligning with a CFTC-approved operator, DraftKings positions itself to capitalize on the growing investor and public interest in prediction markets while avoiding legal risk. With trading volumes for event-based contracts exploding during major U.S. events — particularly elections and sports seasons — DraftKings’ entry gives it access to new revenue streams that complement its core sportsbook business. Unlike peer-to-peer markets, DraftKings monetizes through margin on parlay and combo bets, where payout odds and fee multipliers drive profitability. Expanding this model to prediction markets could amplify its revenue per user and cross-selling potential across entertainment, politics, and finance sectors.

Core Sportsbook and Parlay Bets Remain the Engine of Growth

Even as DraftKings diversifies, its sportsbook remains its backbone. Sportsbook handle grew 6% YoY, while sportsbook revenue climbed 45% YoY, underscoring the power of the parlay-driven model. Average revenue per monthly unique payer (ARPMUP) jumped to $151, up 29%, with 3.3 million monthly active users—a 6% increase. This sharp ARPMUP rise reflects increased adoption of parlay and combination bets, which carry higher margins than single wagers. As FanDuel (owned by Flutter Entertainment) continues to dominate with an estimated 41% sportsbook share, DraftKings holds a solid 24%, making it the clear second player in a U.S. duopoly. The company’s integration with NBCUniversal across streaming and linear media gives it exposure to a sports audience expected to exceed 127 million U.S. viewers by 2027, ensuring that DraftKings’ brand visibility and user acquisition funnel remain unmatched in digital betting.

Valuation and Competitive Landscape Strengthen Bullish Case

At $34.70, DraftKings trades at a forward EV/EBITDA multiple of 20–22.5x and an EV/Sales ratio near 2.9x, compared to FanDuel’s 19–26x range, suggesting relative undervaluation given DraftKings’ growth profile. Despite lacking GAAP profitability, non-GAAP forward estimates imply EPS growth CAGR above 120% through FY2027, with expected revenue expansion of 22% annually. By comparison, Flutter’s premium valuation implies that DraftKings’ discount remains unjustified, especially considering its improving free cash flow and strong balance sheet. Institutional ownership stands at 85%, while insiders hold 2.45% (see insider transactions at DraftKings Profile), signaling sustained institutional confidence even during volatility. The market’s recent correction from $53.61 to $34.70 appears overextended, positioning the current range between $30–$35 as an accumulation zone for long-term investors.

Upcoming Q3 Earnings and Macro Sentiment Key to Near-Term Direction

Investors are now focused on the upcoming Q3 2025 report, which could serve as a catalyst. Analysts expect continued double-digit revenue growth and steady profitability despite macro headwinds and rising competition. A confirmation of parlay margin expansion and steady user growth could push shares toward the upper 52-week range near $50. However, the risk of NFL season payout volatility remains a factor; overly favorable outcomes for bettors could temporarily compress margins. Broader risk-off sentiment linked to the proposed 100% tariffs on Chinese imports could also spark short-term market-wide sell-offs, potentially dragging DKNG temporarily lower before recovering.

Regulatory and Market Risks Balance the Outlook

While prediction markets are a new frontier for DraftKings, their legal and regulatory landscape is still forming. Any acceleration of deregulation for competitors like Polymarket or Kalshi could change market dynamics quickly. Additionally, rising acquisition costs during promotional sports seasons like the NFL may pressure near-term profitability if not managed tightly. Nevertheless, DraftKings’ cash position of $1.26 billion and strong free cash flow generation provide resilience to navigate temporary cost inflation.

Verdict: NASDAQ:DKNG – BUY on Accumulation Range $30–$33, Upside to $50

The fundamentals remain intact: rising profitability, expanding margins, growing ARPMUP, and an innovative step into prediction markets that broadens its ecosystem. The recent sell-off was sentiment-driven — triggered by unrelated Macau headlines and speculative fears over prediction market disruption — yet the company’s position as the U.S. leader in parlay monetization and its strong upcoming earnings potential make DraftKings (NASDAQ:DKNG) a Buy. The ideal accumulation zone sits between $30 and $33, with upside toward $50 as growth reaccelerates through FY2026, supported by diversified revenue from both sports betting and the prediction economy. Real-time performance updates can be viewed at DraftKings Live Chart.

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