DraftKings (NASDAQ: DKNG) is carving out its position as a frontrunner in the U.S. digital sports betting and iGaming industry. With a strong 2024 finish—marking its first-ever full-year adjusted profit and record-breaking revenue of $4.8 billion—the company enters 2025 riding bullish sentiment despite intermittent volatility. The stock’s pullback from its 52-week high of $53.49 has created renewed interest from investors, with analysts maintaining a consensus “Moderate Buy” rating and a median price target near $56.75. From product innovation and state-level expansions to strategic M&A and a billion-dollar buyback, DraftKings is poised for continued upside—albeit with regulatory and competitive risks to monitor.

DraftKings Turns the Corner with Profitability and Revenue Growth

2024 was a landmark year for DraftKings as it posted its first full-year adjusted profit of $181.3 million, reversing a loss of $151 million in 2023. This milestone was underpinned by a **30% year-over-year surge in revenue**, closing at **$4.8 billion**, while Q4 revenue alone clocked in at **$1.4 billion**, up 13%.
The company also set a record with a $436 million sportsbook handle during Super Bowl LIX, pointing to robust engagement levels. CEO Jason Robins underscored the company’s renewed operational discipline and focus on long-term growth, signaling confidence in further monetization of their user base.

Stock Volatility Offers Strategic Entry Points

After rallying 47% year-to-date in early 2025 and peaking at $53.49, DKNG has since pulled back nearly 30%, creating what many analysts deem a tactical buying opportunity.
Short-term declines were driven by unfavorable sports outcomes, notably during March Madness, and broader market volatility. However, the fundamental growth narrative remains unchanged, with DraftKings forming a technical base between $33 and $40 and key resistance at $44.55.

Legal Headwinds and Short-Seller Pressure

The company has not been immune to controversy. A class-action lawsuit targeting its marketing tactics and addiction vulnerabilities, along with a short-seller report from Hindenburg Research, dented sentiment in late 2024, causing a temporary 12% dip. DraftKings issued a rebuttal, and the stock recovered partially, but regulatory scrutiny lingers.
In parallel, SBTech, a DraftKings tech subsidiary, has drawn attention for operating in markets with ambiguous gambling laws, a concern that may influence international expansion.

Analysts Still Firmly Bullish on Long-Term Prospects

Despite mixed headlines, 27 analysts maintain coverage on DraftKings, with over 80% assigning a “Buy” or equivalent rating. Notable targets include:
Needham: $65 (April 2025)

Guggenheim: $61

Benchmark: $51

CFRA: $52

JMP Securities: $60

The median 2025 price target is $56.75, with top-end estimates as high as $65. CFRA also forecasts EPS growth from $0.50 in 2025 to $0.75 in 2026, affirming positive earnings leverage.

2025 Financial Guidance Signals Strong Momentum

DraftKings projects 2025 revenue in the $6.3–$6.6 billion range, implying 32–38% year-over-year growth. The company also expects **adjusted EBITDA between $900 million and $1 billion**, a significant step toward consistent profitability.
Valuation-wise, DKNG trades at 2.8x next-12-month sales, below its historical 3-year average, suggesting possible undervaluation. Analysts anticipate EPS of $0.57–$1.41 this year, with some forecasting over $2 per share by 2026.

Innovation and Expansion Drive Growth Engine

DraftKings is leaning into product innovation to retain engagement and improve margins. Noteworthy initiatives include:
Micro-betting and in-play offerings via the Simplebet acquisition

Expanded player props and progressive parlays across all major leagues

Enhanced NBA product suite now delivering improved user metrics

On the geographic front, legalization of online betting in Missouri is anticipated in 2025, while growth in New York, Massachusetts, and Indiana remains on the horizon. The company is also exploring international moves in Canada, Latin America, and possibly Europe.

Strategic Acquisitions Bolster Long-Term Diversification

Beyond organic growth, DraftKings acquired Jackpocket, a mobile lottery platform, to diversify revenue streams and reduce its dependency on sports betting.
The company is also scouting additional M&A opportunities that could increase its addressable market by up to 40%, particularly in Europe or adjacent gaming verticals.

Buyback Program and Cost Discipline Support Margins

DraftKings recently announced a **$1 billion stock buyback**, a significant signal of management’s confidence in the intrinsic value of the business. This move is expected to support the share price and offset dilution from previous equity raises.
Marketing expenditure, once a concern, is now being curtailed. Analysts expect that reduced customer acquisition costs and tighter spending controls will improve profitability metrics throughout 2025.

Risks to Watch: Regulation, Competition, and Profitability

Despite strong fundamentals, DraftKings faces key risks:
Regulatory Uncertainty: State-by-state legislation still dictates expansion. High tax rates (e.g., 51% in New York) could compress margins.

Legal Risk: Lawsuits and short-seller scrutiny, though manageable, introduce reputational risk.

Competitive Pressure: FanDuel is gaining market share, and several new entrants are chasing a finite pool of bettors.

Profitability Trajectory: While adjusted EBITDA is solid, net income remains in the red. The path to sustained earnings remains critical.

Conclusion: A Promising Growth Stock with Calculated Risks

DraftKings represents a compelling high-growth investment with expanding profitability and deep market entrenchment. The bull case hinges on:
Consistent revenue growth above 30%

Innovative product rollouts and acquisitions

Further U.S. state legalizations and global expansion

Improved margin discipline and capital return strategies

However, regulatory shifts, legal scrutiny, and competitive intensity could limit upside. Investors should monitor quarterly results, legislative developments, and analyst sentiment.

In the words of CFRA’s Zachary Warring: “DraftKings and FanDuel are the two winners in mobile sports betting in the U.S., and we expect the two to maintain over 80% market share.”