DraftKings Stock (DKNG) Hits New Low Ahead of Earnings
DraftKings stock (NASDAQ: DKNG) dropped to a new low of $27.89 this week as investors await the company's earnings report after today's market close. The stock's decline results from multiple challenges, including a recent federal lawsuit, analyst downgrades, and intensifying competition in the online gaming market.
Financial Expectations and Past Performance
DraftKings is projected to report an earnings per share (EPS) of -$0.26 for the quarter, a significant decline compared to the positive EPS of $0.38 in Q2 2025. In that quarter, the company reported $1.513 billion in revenue, marking a 37% year-over-year increase.
Legal Issues Impacting Investor Confidence
The company faces a federal lawsuit accusing it of illegally sharing private user data, which allegedly led to harassment and a subsequent cover-up. The lawsuit seeks more than $13 million in damages and has unsettled investors concerned about financial and reputational risks.
“The news of the lawsuit caused a 7.3% drop in the stock price, underscoring market sensitivity to data privacy and governance issues.”
Analyst Downgrades and Market Challenges
Bank of America recently downgraded DraftKings from "Buy" to "Neutral," citing underperformance in the iGaming segment, loss of market share, and possible adverse effects from state-level tax policies.
The combination of legal troubles, competitive pressures, and cautious analysts has contributed to the stock's weakening position as the earnings announcement approaches.
Author's Summary
DraftKings faces significant hurdles ahead of its earnings report, with legal issues and market pressures driving its stock to new lows despite past revenue growth.