DraftKings Inc. (NASDAQ:DKNG) is trading higher in Wednesday’s premarket session after hitting a 52-week low during Tuesday’s regular trading.
The stock touched $25.72 during Tuesday’s session, marking its lowest level in a year, before rebounding in after-hours and premarket trading.
Regulatory Headwinds Weigh On Sentiment
DraftKings has faced pressure following the Commodity Futures Trading Commission’s announcement that it will draft “clear rules” for prediction markets and withdraw a proposal that prohibited sports and politics-related contracts.
Competition From Robinhood, Prediction Markets
Robinhood Markets Inc. (NASDAQ:HOOD) has been pushing sports event contracts inside its brokerage app via Kalshi, processing more than 11 billion contracts and generating roughly $100 million in annualized revenue from prediction markets.
Event contracts are priced in cents and can be sold before outcomes are determined, with Robinhood charging as little as 1 cent per contract. Because DraftKings operates under state-by-state gaming licenses and taxes, it cannot match nationally scalable, CFTC-style products on pricing.
The National Football League has placed prediction markets on its prohibited advertising list for Super Bowl LX alongside tobacco and firearms, according to a report from FrontOfficeSports. However, sports betting companies including DraftKings, are expected to air commercials during the Feb. 8 game.
DraftKings’ Technical Indicators
DraftKings is currently trading 14.6% below its 20-day simple moving average (SMA) and 20% below its 100-day SMA, indicating a bearish trend. Shares have decreased 35.90% over the past 12 months and are positioned closer to their 52-week lows than highs, suggesting ongoing challenges for the stock.
The RSI is at 25.09, which is considered oversold territory, while the MACD is below its signal line, indicating bearish pressure on the stock. The combination of oversold RSI and bearish MACD suggests mixed momentum.
Key Support: $26.00
Key Resistance: $32.00
DraftKings’ Earnings Forecast and Analyst Ratings
Investors are looking ahead to the next earnings report on Feb. 12.
- EPS Estimate: 36 cents (Up from 14 cents YoY)
- Revenue Estimate: $1.98 billion (Up from $1.39 billion YoY)
Analyst Consensus & Recent Actions:
The stock carries a Buy Rating with an average price target of $49.12. Recent analyst moves include:
- Canaccord Genuity: Buy (Lowers Target to $50.00) (Feb. 3)
- Stifel: Buy (Lowers Target to $44.00) (Jan. 30)
- Guggenheim: Buy (Lowers Target to $42.00) (Jan. 29)
DKNG Price Action: DraftKings shares were up 2.28% at $27.37 during premarket trading on Wednesday, according to Benzinga Pro data.
Photo: Lori-Butcher / Shutterstock
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