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DraftKings Stock Gains 12% in 3 Months: Should You Buy, Sell or Hold?
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Key Takeaways
DKNG shares have gained 11.5% in the past three months, outperforming both the sector and industry.
DKNG is benefiting from stronger Sportsbook monetization, a higher parlay mix and disciplined cost control.
DKNG plans to invest roughly $200M-$300M in Predictions this year, creating near-term margin pressure.
Shares of DraftKings Inc. (DKNG - Free Report) have gained 11.5% in the past three months, outperforming the Zacks Consumer Discretionary sector’s decline of 0.4% and the Zacks Gaming industry’s rise of 2.5%.
DKNG’s Past 3 Months’ Price Performance
Image Source: Zacks Investment Research
Much of this outperformance can be attributed to improving confidence in DraftKings’ core operating momentum. Despite continued investment in new growth areas, the stock has been well-received on account of stronger Sportsbook monetization, higher parlay mix, improved promotional efficiency and disciplined cost control. Also, early progress in Predictions, including lower customer acquisition costs, expanded tradable markets and positive market-making returns, likely added to the upside.
After DKNG’s roughly 12% climb, investors face a more nuanced decision: whether the rally has further room to run or whether patience is warranted at current levels. Let’s examine the company’s core growth drivers and emerging risks to determine the right course of action.
What’s Working in DraftKings’ Favor?
Several strategic initiatives and favorable operating trends have strengthened investor confidence in DKNG stock. DraftKings continues to benefit from a resilient Sportsbook platform, supported by product enhancements, deeper media integrations and sustained engagement across major sports. The company’s rising parlay mix and improved monetization trends demonstrate stronger customer adoption of higher-value betting formats, while a stable competitive environment and disciplined promotional strategy continue to support the durability of its core sports betting franchise.
DKNG is also making visible progress on profitability and operating efficiency. The company’s focus on cost discipline, adjusted gross margin expansion and more efficient expense management is strengthening its earnings profile. AI-led execution and streamlined teams are improving productivity across the organization, allowing DraftKings to scale more effectively while maintaining flexibility to invest in long-term growth opportunities. These efficiency gains enhance confidence in the company’s ability to deliver stronger margin performance over time.
DraftKings is leveraging sports Predictions as a key extension of its growth strategy. By integrating Predictions into its flagship app, the company is reducing acquisition friction and expanding its reach into markets where traditional online sports betting remains unavailable. Its Super App strategy, market-making capabilities, planned proprietary exchange and upcoming combo offerings position DKNG to deepen customer engagement and capture a larger share of sports-related consumer activity.
With a strengthening Sportsbook business, improving operating leverage and multiple growth levers across Predictions, iGaming and future market legalization, DraftKings remains well positioned to sustain its long-term growth trajectory.
DKNG’s Bottom Line Improves
DKNG's earnings estimates for 2026 have increased in the past 60 days. The company is expected to deliver adjusted earnings per share (EPS) of $1.15 in 2026 compared with the reported figure of 66 cents in 2025.
DKNG Earnings Estimate Trend
Image Source: Zacks Investment Research
Over the past 60 days, estimates for Accel Entertainment, Inc. (ACEL - Free Report) and Boyd Gaming Corporation (BYD - Free Report) have declined 5.4% and 2.5%, respectively, while the estimates for PENN Entertainment, Inc. (PENN - Free Report) have increased 4.8%.
What Could Hurt DKNG Going Forward?
DraftKings’ aggressive push into Predictions may weigh on its near-term earnings profile. The company plans to invest roughly $200 million to $300 million in this category this year, with much of the spending expected in the coming months and the back half of the year. While Predictions may expand DraftKings’ addressable market, the business remains in an early stage, and meaningful spending on marketing, product development and liquidity-building could absorb a portion of the company’s core profitability before returns are fully proven.
The company’s strategy to build leadership in Predictions is also exposed to execution and regulatory challenges. DraftKings is still developing key parts of the offering, including its proprietary exchange and combo products, while customer behavior and long-term monetization remain uncertain. If customer acquisition costs rise, engagement weakens or regulatory scrutiny increases, the company may need to recalibrate its investment plans. Any delay in scaling the Predictions ecosystem efficiently could pressure margins and dampen investor confidence.
DraftKings also continues to face challenges in iGaming, where the company has acknowledged that it has lagged the broader market. Its historical focus on Sportsbook cross-sell has left room for improvement among iCasino-first and slots-first customers. Although new products and marketing initiatives have been introduced, the recovery is still developing. Slower progress in iGaming could limit revenue diversification and leave DraftKings more dependent on Sportsbook and Predictions to sustain growth.
DKNG Trades at a Discount
DKNG is trading at a discount to the broader industry, with a forward 12-month price-to-earnings (P/E) multiple of 18.28, below the industry average of 23.79. However, the stock trades above select peers such as Accel Entertainment, Boyd Gaming and PENN Entertainment, which carry P/E ratios of 17.58, 11.23 and 14.02, respectively.
DKNG’s P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
How to Play DraftKings Stock?
While DraftKings’ recent rally reflects improving confidence in its core Sportsbook momentum, the broader investment case remains balanced rather than decisively bullish. Stronger monetization, a higher parlay mix, disciplined promotional spending and positive earnings estimate revisions support the company’s improving fundamental profile. At the same time, elevated investment in Predictions, execution risks tied to scaling the platform and still-developing iGaming momentum may keep margin visibility uneven in the near term.
Although DKNG trades at a discount to the industry on a forward P/E basis, the stock’s recent appreciation suggests that part of the near-term optimism may already be reflected in the valuation. The upcoming investment cycle and uncertainty around the long-term economics of Predictions warrant a selective approach. Existing shareholders may consider holding their positions to benefit from DraftKings’ improving core execution, while prospective investors may prefer to wait for a more favorable entry point before initiating positions.
View the Zacks #1 Rank List
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DraftKings Stock Gains 12% in 3 Months: Should You Buy, Sell or Hold?
Key Takeaways
Shares of DraftKings Inc. (DKNG - Free Report) have gained 11.5% in the past three months, outperforming the Zacks Consumer Discretionary sector’s decline of 0.4% and the Zacks Gaming industry’s rise of 2.5%.
DKNG’s Past 3 Months’ Price Performance
Image Source: Zacks Investment Research
Much of this outperformance can be attributed to improving confidence in DraftKings’ core operating momentum. Despite continued investment in new growth areas, the stock has been well-received on account of stronger Sportsbook monetization, higher parlay mix, improved promotional efficiency and disciplined cost control. Also, early progress in Predictions, including lower customer acquisition costs, expanded tradable markets and positive market-making returns, likely added to the upside.
After DKNG’s roughly 12% climb, investors face a more nuanced decision: whether the rally has further room to run or whether patience is warranted at current levels. Let’s examine the company’s core growth drivers and emerging risks to determine the right course of action.
What’s Working in DraftKings’ Favor?
Several strategic initiatives and favorable operating trends have strengthened investor confidence in DKNG stock. DraftKings continues to benefit from a resilient Sportsbook platform, supported by product enhancements, deeper media integrations and sustained engagement across major sports. The company’s rising parlay mix and improved monetization trends demonstrate stronger customer adoption of higher-value betting formats, while a stable competitive environment and disciplined promotional strategy continue to support the durability of its core sports betting franchise.
DKNG is also making visible progress on profitability and operating efficiency. The company’s focus on cost discipline, adjusted gross margin expansion and more efficient expense management is strengthening its earnings profile. AI-led execution and streamlined teams are improving productivity across the organization, allowing DraftKings to scale more effectively while maintaining flexibility to invest in long-term growth opportunities. These efficiency gains enhance confidence in the company’s ability to deliver stronger margin performance over time.
DraftKings is leveraging sports Predictions as a key extension of its growth strategy. By integrating Predictions into its flagship app, the company is reducing acquisition friction and expanding its reach into markets where traditional online sports betting remains unavailable. Its Super App strategy, market-making capabilities, planned proprietary exchange and upcoming combo offerings position DKNG to deepen customer engagement and capture a larger share of sports-related consumer activity.
With a strengthening Sportsbook business, improving operating leverage and multiple growth levers across Predictions, iGaming and future market legalization, DraftKings remains well positioned to sustain its long-term growth trajectory.
DKNG’s Bottom Line Improves
DKNG's earnings estimates for 2026 have increased in the past 60 days. The company is expected to deliver adjusted earnings per share (EPS) of $1.15 in 2026 compared with the reported figure of 66 cents in 2025.
DKNG Earnings Estimate Trend
Image Source: Zacks Investment Research
Over the past 60 days, estimates for Accel Entertainment, Inc. (ACEL - Free Report) and Boyd Gaming Corporation (BYD - Free Report) have declined 5.4% and 2.5%, respectively, while the estimates for PENN Entertainment, Inc. (PENN - Free Report) have increased 4.8%.
What Could Hurt DKNG Going Forward?
DraftKings’ aggressive push into Predictions may weigh on its near-term earnings profile. The company plans to invest roughly $200 million to $300 million in this category this year, with much of the spending expected in the coming months and the back half of the year. While Predictions may expand DraftKings’ addressable market, the business remains in an early stage, and meaningful spending on marketing, product development and liquidity-building could absorb a portion of the company’s core profitability before returns are fully proven.
The company’s strategy to build leadership in Predictions is also exposed to execution and regulatory challenges. DraftKings is still developing key parts of the offering, including its proprietary exchange and combo products, while customer behavior and long-term monetization remain uncertain. If customer acquisition costs rise, engagement weakens or regulatory scrutiny increases, the company may need to recalibrate its investment plans. Any delay in scaling the Predictions ecosystem efficiently could pressure margins and dampen investor confidence.
DraftKings also continues to face challenges in iGaming, where the company has acknowledged that it has lagged the broader market. Its historical focus on Sportsbook cross-sell has left room for improvement among iCasino-first and slots-first customers. Although new products and marketing initiatives have been introduced, the recovery is still developing. Slower progress in iGaming could limit revenue diversification and leave DraftKings more dependent on Sportsbook and Predictions to sustain growth.
DKNG Trades at a Discount
DKNG is trading at a discount to the broader industry, with a forward 12-month price-to-earnings (P/E) multiple of 18.28, below the industry average of 23.79. However, the stock trades above select peers such as Accel Entertainment, Boyd Gaming and PENN Entertainment, which carry P/E ratios of 17.58, 11.23 and 14.02, respectively.
DKNG’s P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
How to Play DraftKings Stock?
While DraftKings’ recent rally reflects improving confidence in its core Sportsbook momentum, the broader investment case remains balanced rather than decisively bullish. Stronger monetization, a higher parlay mix, disciplined promotional spending and positive earnings estimate revisions support the company’s improving fundamental profile. At the same time, elevated investment in Predictions, execution risks tied to scaling the platform and still-developing iGaming momentum may keep margin visibility uneven in the near term.
Although DKNG trades at a discount to the industry on a forward P/E basis, the stock’s recent appreciation suggests that part of the near-term optimism may already be reflected in the valuation. The upcoming investment cycle and uncertainty around the long-term economics of Predictions warrant a selective approach. Existing shareholders may consider holding their positions to benefit from DraftKings’ improving core execution, while prospective investors may prefer to wait for a more favorable entry point before initiating positions.
DKNG currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.