New York, Feb 17, 2026, 07:13 EST — Premarket
DraftKings shares were back in focus early Tuesday, with Wells Fargo slashing its price target to $30 from $49 just days after the stock plunged 13.51% to $21.76. Wells Fargo maintained its Overweight rating, describing the revised target as a “(hopefully) conservative first cut of guidance.” 1
Timing’s key here: long breaks between sessions can amplify positioning resets, particularly for high-beta consumer stocks. DraftKings, meanwhile, is working to shore up its growth narrative—one that now carries a heftier investment tab.
The company’s move into prediction markets—event contracts that settle on an outcome—has shifted the investor conversation. Now, it’s not just about products; regulatory scrutiny is coming into sharper focus. That brings a fresh batch of questions, on top of the standard issues facing sports-betting operators.
Jefferies’ David Katz thinks the recent reset in DraftKings outlook—and the stock slide—“should be at an end,” though he trimmed his price target down to $46 from $50. Curry Baker from Guggenheim also pulled back his target, now $37 instead of $42, but pointed out that “underlying consumer demand” is still solid, even though those bettor-friendly NFL results weighed on the numbers. 2
DraftKings posted fourth-quarter revenue of $1,989 million, marking a 43% increase, and set out its 2026 outlook: revenue in the $6.5 billion to $6.9 billion range, with adjusted EBITDA seen between $700 million and $900 million. CEO Jason Robins pointed to “massive, incremental opportunity” for the company in DraftKings Predictions. CFO Alan Ellingson noted that DraftKings bought back 16 million shares in 2025. 3
Adjusted EBITDA, a profit metric that excludes interest, taxes, depreciation, amortization, plus certain one-off costs, is closely watched in online betting. Marketing and promo spending can throw numbers around from one quarter to the next.
Legal challenges are cropping up for prediction markets in the U.S., with state officials contending these offerings look a lot like unauthorized gambling, despite being pitched as federally regulated event contracts. If courts or regulators decide to clamp down, DraftKings may face a shorter growth window or heftier compliance bills as it invests in scaling its operations. 4
DraftKings faces off with rivals like FanDuel and BetMGM, and any shift in guidance usually ripples through the sector. Traders are keeping an eye on promotional budgets as March approaches, a stretch that historically drives up betting action.
With DKNG, it’s a tight focus right now: the market wants to know just how much cash goes out the door to pick up new users and roll out fresh products, and how fast those investments pay off in margins. If costs start to drift above projections, that could quickly pressure a stock that’s already been through a steep reset.
DraftKings will hold its virtual investor day on Monday, March 2. Executives are expected to detail their outlook, walk through the company’s financial framework, and lay out capital allocation plans. 5
