Guggenheim cuts DraftKings price target to $60, keeps buy rating

On Monday, Guggenheim Securities adjusted its outlook on DraftKings Inc. (NASDAQ: NASDAQ:DKNG) shares, reducing the price target to $60.00 from the previous $61.00, while still holding a positive stance with a Buy rating. According to InvestingPro data, the stock currently trades at $36.23, with analysts’ targets ranging from $36 to $74, suggesting significant potential upside. The company’s current market capitalization stands at approximately $18 billion. The adjustment followed DraftKings’ first-quarter earnings report for 2025, where the company’s revenue reached $1,409 million, marking a 20% year-over-year increase. However, this figure fell short of the $1,465 million and $1,429 million expected by Guggenheim and the consensus estimates, respectively. InvestingPro analysis shows the company has maintained strong revenue growth, with a trailing twelve-month revenue of $5 billion and a robust revenue CAGR of 71% over the past five years.

DraftKings’ EBITDA for the quarter stood at $103 million, which did not meet Guggenheim’s projection of $125 million but surpassed the consensus estimate of $98 million. The online sports betting company also revised its revenue and adjusted EBITDA forecast for the year 2025. This revision was attributed to consumer-friendly outcomes during the NCAA Men’s Basketball Tournament, which saw an unprecedented victory rate of 82% for higher-seeded teams.

In response to the updated company guidance, Guggenheim has revised its own forecasts for DraftKings’ 2025 revenue and adjusted EBITDA to $6.32 billion and $862 million, respectively, aligning with the midpoint of the company’s projections. Despite the adjustments, Guggenheim’s analyst noted that the underlying consumer demand for DraftKings’ offerings remains robust, with no noticeable impact from macroeconomic factors observed thus far. Moreover, the management at DraftKings is reportedly committed to maintaining cost discipline and enhancing operational efficiencies. InvestingPro analysis indicates the company maintains a healthy current ratio of 1.2 and operates with a moderate debt level. For investors seeking deeper insights, InvestingPro offers comprehensive analysis with over 10 additional ProTips and a detailed Pro Research Report, available among the 1,400+ US equity reports on the platform.

In other recent news, DraftKings Inc. reported its first-quarter 2025 earnings, revealing a revenue of $1.41 billion and an EPS of $0.12, both falling short of analyst forecasts. The company adjusted its full-year 2025 revenue guidance to between $6.2 billion and $6.4 billion, down from previous estimates of $6.3 billion to $6.6 billion. Adjusted EBITDA guidance was also revised to a range of $800 million to $900 million, lower than the prior forecast of $900 million to $1 billion. Despite these adjustments, DraftKings demonstrated resilience with a 20% year-over-year revenue growth in Q1 2025. Analyst firms like Goldman Sachs and Stifel maintained their Buy ratings on DraftKings, with price targets of $59 and $53, respectively, while Citizens JMP held a Market Outperform rating with a $54 target. BMO Capital Markets adjusted its price target to $64 from $65, maintaining an Outperform rating. The company also highlighted its strategic focus on live betting and AI integration, which now constitutes over 50% of its total handle. DraftKings repurchased approximately $140 million in stock during the quarter, indicating its readiness to return capital to shareholders.

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