Sports betting platform DraftKings (DKNG) is set to report its Q1 2026 earnings on May 7, with Wall Street expecting EPS of $0.01 versus -$0.07 in the same quarter last year. At the same time, revenue is anticipated to come in at $1.63 billion, which is an increase from the $1.41 billion in Q1 2025. However, it is worth noting that DKNG has not enjoyed a good track record lately when it comes to beating estimates. Indeed, the firm has beaten EPS forecasts only four times over the past eight quarters.
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And this choppy track record isn’t helping the stock with analysts. Indeed, investment firm MoffettNathanson, led by Robert Fishman, downgraded DraftKings from Buy to Hold and lowered its price target to $27 from $38. The firm admitted that it is late to the downgrade, especially since DraftKings has already fallen from last year’s highs and continued to move lower this year. However, it said that the stock still faces a bigger issue that valuation alone cannot fix.
The main problem is uncertainty around prediction markets, which have become a major overhang for the stock. As a result, the firm does not expect sentiment to improve until investors receive more regulatory clarity. Until then, even a cheaper valuation may not be enough to bring buyers back into the name.
Options Market Implies a 9.5% Move
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. Interestingly, traders are pricing in a post-earnings move of about 9.5%. This is based on the $24.50 strike price, which has calls priced at $0.90 and puts priced at $1.43. Meanwhile, recent call volume has been running above normal and leaning more bullish.
Is DKNG Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on DKNG stock based on 25 Buys, six Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average DKNG price target of $34.01 per share implies 39.8% upside potential.
