DraftKings Inc (NASDAQ:DKNG) shares plummeted in pre-market trading Friday despite reporting record fourth-quarter results. While the digital gaming giant met revenue expectations, a conservative outlook for the upcoming fiscal year sparked a sharp sell-off among investors.
DraftKings reported fourth-quarter revenue of $1.99 billion, a 43% increase year-over-year, which aligned with analyst estimates. The company clocked adjusted earnings of 36 cents per share, compared to a loss of 28 cents per share in the prior-year period.
Outlook Falls Short of Estimates
The primary catalyst for the decline was the company’s fiscal year 2026 guidance. DraftKings projected revenue between $6.5 billion and $6.9 billion, notably below the analyst consensus of $7.32 billion.
Technical Analysis
DraftKings is trading 26.7% below its 20-day simple moving average (SMA) and 35.4% below its 100-day SMA, indicating a bearish trend. Over the past 12 months, shares have decreased by 45.83%, and they are currently positioned closer to their 52-week lows than highs.
The RSI is at 28.60, which is considered oversold, suggesting potential for a rebound if buying interest returns. Meanwhile, the MACD is below its signal line, indicating bearish pressure on the stock.
The combination of oversold RSI and bearish MACD suggests mixed momentum, reflecting the current market challenges.
- Key Resistance: $25.00
- Key Support: $20.00
Analyst Outlook
The stock carries a Buy Rating with an average price forecast 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 down 15.54% at $21.25 during premarket trading on Friday, according to Benzinga Pro data.
Photo: Lori-Butcher / Shutterstock
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