Benchmark reiterated a Buy rating and US$ 30 price target for DraftKings Inc. on Monday, citing the company’s resilience amid softening online sports betting trends in New York.
DraftKings’ shares traded at US$ 25.26 at the time of the report, down 27% year-to-date. The company’s 8th-week betting volume in New York rose 3.7% year-over-year, but gross gaming revenue fell 31.3%, with a retention rate of 7.7%, down roughly 400 basis points from 11.7% a year earlier. Rival FanDuel, owned by Flutter, posted a 5.1% volume increase but saw gross gaming revenue decline 4.1%, with a retention rate of 8.1%, down 80 basis points from 8.9%.
The broader New York market showed a 29.9% drop in online sports betting volume and a 10.9% decline in gross gaming revenue during the same week. Statewide retention improved to 8.0% from 6.3% a year ago, though it remained below the 11.7% recorded in the prior week. Excluding Fanatics, which generated US$ 47.7 million in bets compared with US$ 212.7 million a year earlier, statewide betting volume rose about 0.8% YoY while gross gaming revenue fell roughly 20%.
PENN Entertainment reported a 29.8% volume decline and a 63.2% drop in gross gaming revenue, with its retention rate falling to 6.5% from 12.3%. Rush Street saw volume fall 11.2% but gross gaming revenue rise 8.4%, with retention expanding to 11.7% from 9.6%.
Fanatics’ entry into the market contributed to the volatility, with its US$ 3.5 million gross gaming revenue in the week compared with about US$ 0.4 million a year ago. Prediction markets also saw activity shift, with Kalshi’s volume reaching US$ 10 billion, while Bank of America estimated a US$ 4 million potential EBITDA impact on FanDuel from Kalshi’s parlay market fee adjustments.
Benchmark’s US$ 30 target implies roughly 19% upside from current levels, while Mizuho maintained an Outperform rating with a US$ 45 target and Truist Securities kept its Buy rating with a US$ 29 target.
