DraftKings Faces Significant Stock Decline Amid Litigation Threats, Analysts Weigh Mixed Long-Term Prospects

DraftKings stock faces significant downward pressure due to emerging competition from prediction markets like Kalshi and Polymarket, which are intensifying concerns about the company’s long-term business disruption and regulatory risks. Spruce Point Management warns that DraftKings could fall by 35% to 60% as state regulators threaten to revoke licenses if the company pursues prediction market ventures amid ongoing litigation. Despite these headwinds, several analysts maintain bullish ratings with adjusted price targets, reflecting mixed views about the company's prospects; Oppenheimer lowered its price target from $60 to $55 but still rates DraftKings as 'Outperform,' while Citi cut its target to $56 and kept a 'Neutral' rating. Some analysts see recent stock declines as a buying opportunity, emphasizing DraftKings' strong market position in legal sports betting despite challenges from prediction markets. The company continues to operate in multiple states with diversified revenue streams from sports betting, iGaming, and fantasy sports, while navigating a competitive and regulatory environment that remains uncertain. Overall, investors face a complex outlook balancing growth potential against regulatory and competitive threats.