DraftKings Stock Lost 12.3% Last Month. Could Thursday's Earnings Help Turn Things Around?

DraftKings' third-quarter earnings update may serve as a key moment for the declining gaming stock. The company must, however, uphold its record of exceeding expectations and raising guidance.

October was a tough month for DraftKings (DKNG +1.11%), whose shares fell 12.32%. The Halloween closing price of $30.59 marked its lowest level since August 2024.

What Went Wrong for DraftKings

Several factors contributed to the decline in DraftKings’ valuation. Investors were unsettled by the rising activity on prediction markets such as Kalshi, viewing them as emerging competition for traditional sports betting platforms like DraftKings.

Market participants interpreted the appearance of sports event derivative contracts as competitive threats to DraftKings' offerings.

As investors reacted to these developments, DraftKings shares faced additional pressure. However, the main drag on third-quarter margins and profitability came from favorable NFL results for bettors. Simply put, the house did not win as often as expected.

Impact on Financial Expectations

During September, the most crucial month of the third quarter for sportsbooks, DraftKings faced considerable losses. This prompted analysts to trim their profit forecasts. Despite the setbacks, much of the bad news is likely already reflected in the current stock price.

With the company's third-quarter results set for release on Thursday, investors are hoping for signs of a rebound. While recovery is possible, a turnaround is by no means guaranteed.

Author’s Summary

DraftKings faces pressure after a 12% monthly drop as investors await Thursday’s earnings, which could either confirm weakness or spark the start of recovery.

The Motley Fool — 2025-11-04