DraftKings Inc. (DKNG) PT Lowered to $30 at TD Cowen

TD Cowen analyst Lance Vitanza lowered the price target on DraftKings Inc. (NASDAQ: DKNG) to $30.00 (from $45.00) while maintaining a Buy rating.

The analyst commented: "Despite a better-than-expected 4Q, investors dumped shares likely on a disappointing guide that reflects all the costs of prediction market expansion yet none of the benefits. We expect benefits will come, eventually, and thus maintain our Buy rating despite resetting our price target. Our new $30 price target reflects 20x our FY26 EBITDA estimate.

Sportsbook revenue beat expectations as higher monetization amplified solid volume growth. Handle increased 13% y/y in the quarter to almost $17 billion, while revenue grew even more quickly as DraftKings converted more wagering activity into net gaming revenue. The company generated gross gaming revenue ("GGR") on a hold slightly above 12% and net gross revenue ("NGR") margin expanded to roughly 8%, up approximately 250 bps y/y. While favorable sports outcomes contributed in 4Q, management drove improvement through a nearly 500 bps y/y increase in parlay mix and tighter promotional optimization, both of which lifted NGR margin."

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