DraftKings Shares Drop Over 30% in a Year as Argus Downgrades to Hold
DraftKings (NASDAQ:DKNG) has seen its stock fall more than 43% from its 52-week high, trading at $26.17 per share. In response to the declining performance and rising costs, research firm Argus downgraded DKNG from Buy to Hold, citing concerns over customer acquisition expenses, state gaming tax increases, and aggressive competition in prediction markets. Despite a strong Q4 2025 with nearly $2 billion in revenue and adjusted EPS of 36 cents—well above expectations—the company is investing heavily in its federally regulated predictions platform. This investment will add tens of millions in costs over the short term, including new hires and technology development. CEO Jason Robins emphasized that execution speed and brand strength are key to long-term success. The broader analyst community remains cautiously optimistic with 30 Buy ratings versus two Sells, but concerns remain about tax uncertainty and rising operating expenses. DraftKings' 2026 guidance assumes stable state tax rates; any increases could significantly impact margins.
Topics: Argus customer acquisition costs downgrade DraftKings Hold rating state gaming taxes