New York, Feb 17, 2026, 07:13 EST — Premarket
DraftKings shares drew fresh attention before the opening bell on Tuesday after Wells Fargo cut its price target on the online betting company, days after the stock slid 13.51% to $21.76. Wells Fargo kept an Overweight rating but lowered its target to $30 from $49, calling the new outlook a “(hopefully) conservative first cut of guidance.” (TipRanks)
The timing matters because a long gap between sessions can magnify resets in positioning, especially in high-beta consumer names. DraftKings is also trying to defend a growth story that now comes with a bigger line item for investment.
A key point is the company’s push into prediction markets — event contracts that pay out based on an outcome — which investors increasingly view through a regulatory lens, not just a product lens. That adds a second set of questions to the usual sports-betting playbook.
Jefferies analyst David Katz said the downshift in DraftKings estimates and the share drop “should be at an end,” and cut his price target to $46 from $50. Guggenheim analyst Curry Baker lowered his target to $37 from $42 and said “underlying consumer demand” remained strong even after results were pressured by bettor-friendly NFL outcomes. (TipRanks)
DraftKings reported fourth-quarter revenue of $1,989 million, up 43%, and introduced 2026 guidance for revenue of $6.5 billion to $6.9 billion and adjusted EBITDA of $700 million to $900 million. Chief executive Jason Robins said the company sees a “massive, incremental opportunity” in DraftKings Predictions, while CFO Alan Ellingson said DraftKings repurchased 16 million shares in 2025. (GlobeNewswire)
Adjusted EBITDA is a profitability measure companies use to strip out items such as interest, taxes, depreciation and amortization, and selected costs they call non-recurring. Investors track it closely in online betting because marketing and promotions can swing hard quarter to quarter.
But prediction markets are facing legal pushback in the United States, with states arguing the products resemble unlicensed gambling even when they are marketed as federally regulated event contracts. A tougher stance from regulators or courts could narrow the runway for expansion or raise compliance costs as DraftKings spends to build out the business. (The Guardian)
DraftKings competes with peers such as FanDuel and BetMGM, and sentiment tends to spill across the group when guidance resets. Traders will be watching whether the industry keeps a lid on promotional spending as the calendar turns toward March events that often lift betting volume.
For DKNG, the near-term debate stays narrow: how much the company has to spend to add customers and launch new products, and how quickly those bets show up in margins. Any hint that costs are running ahead of plan would test a stock that has already absorbed a sharp repricing.
The next scheduled catalyst is DraftKings’ virtual investor day on Monday, March 2, when executives are set to outline the opportunity ahead and discuss the firm’s financial framework and capital allocation priorities. (Nasdaq)
