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Investing.com - Benchmark maintained its Buy rating and $53.00 price target on DraftKings Inc. (NASDAQ:DKNG), a $21.35 billion market cap company showing impressive 25.8% revenue growth, following the company’s NFL Week 1 performance in New York, which showed strong handle growth but unusually weak hold.
The firm noted that sharp margin compression across the market resulted from bettor-friendly NFL outcomes, including favorites covering and overs hitting, combined with strong results on popular props and parlays.
Promotional intensity surrounding the NFL kickoff inflated handle but weighed on profitability, with Benchmark suggesting DraftKings leaned heavily into promotions to capture engagement and drive volume.
This promotional strategy helped DraftKings outpace the market in handle growth but ultimately reduced its net revenue margin, according to the research firm’s analysis.
Benchmark pushed back against speculation that prediction markets are beginning to pressure operator share, citing reported strong handle growth, management commentary from DraftKings and Flutter, along with observed activity from Kalshi.
In other recent news, DraftKings Inc. announced it has secured a direct mobile sports betting license from the Missouri Gaming Commission. This development allows DraftKings to operate independently in Missouri, with plans to launch its online sportsbook on December 1, 2025, pending regulatory approvals. Additionally, DraftKings remains a focal point for analysts, with Citizens JMP reiterating a Market Outperform rating and a $54 price target, citing a robust prediction market news cycle. BMO Capital has also reaffirmed its Outperform rating with a $65 price target, highlighting DraftKings as its top sector pick. This comes after a significant increase in New York’s sports betting handle, largely attributed to a high-stakes player. Benchmark continues to support DraftKings with a Buy rating and a $53 price target, noting the competitive landscape in prediction markets against FanDuel. Meanwhile, Robinhood Markets introduced football prediction markets, impacting competitors like DraftKings.
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