DraftKings faces rising costs and tax uncertainties, prompting Argus to cut its rating amid a 43% share decline from 52-week highs.
DraftKings (NASDAQ:DKNG) was downgraded to Hold from Buy by Argus, reflecting a 43% decline in shares from their 52-week high of $48.78 to $26.17. The firm cited rising customer acquisition costs, state tax uncertainties, and aggressive competition as key concerns.
Despite strong Q4 revenue of nearly $2 billion, up 43% year-over-year, and adjusted EPS doubling to 36 cents, Argus flagged market share losses in U.S. Internet gaming. The broader analyst community remains more optimistic, with a consensus price target of $34.11, suggesting potential upside.
DraftKings’ investment in a federally regulated predictions platform is expected to add tens of millions in costs, while 2026 guidance assumes stable state tax rates, a risk highlighted by Argus.