DraftKings (DKNG1) AI Stock Analysis

Company Guidance

For fiscal year 2026, DraftKings updated revenue guidance to $6.35 billion to $6.55 billion and adjusted EBITDA guidance to an adjusted EBITDA loss of $175 million to $275 million, including adjusted EBITDA investment in predictions of $650 million to $700 million, core adjusted EBITDA of $875 million to $925 million, fourth-quarter predictions investment of $175 million to $225 million, and predictions revenue that will be immaterial in fiscal year 26; for fiscal year 27, it introduced revenue guidance of $7.35 billion to $7.75 billion, an increase of 17% year-over-year at the midpoint, adjusted EBITDA guidance of $800 million to $1 billion, core revenue of $6.7 billion to $7 billion, up 4% to 9% year-over-year compared to the midpoint of fiscal year 26 guidance, core adjusted EBITDA of $1.15 billion to $1.25 billion, or $1.2 billion at the midpoint, core adjusted EBITDA margin of approximately 8% in 2027, up approximately 360 basis points from this year at the midpoint of guidance, predictions revenue of $650 million to $750 million, and predictions adjusted EBITDA investments of $250 million to $350 million, stepping down to $300 million at the midpoint; management expects a 2026 cohort payback in approximately 20 months, predictions to be a tailwind to adjusted EBITDA in 2028, significant excess free cash flow in 2027 even after funding predictions investments, and predictions itself to generate free cash flow in 2028.