DraftKings $DKNG ( ▼ 13.51% ) shares sank in after-hours trading after the sports betting giant issued disappointing forecasts for 2026, even though its fourth-quarter results met or beat expectations. The company projected full-year revenue between $6.5 billion and $6.9 billion, well below Wall Street’s $7.29 billion estimate, triggering a sharp selloff of roughly 15%.
Investors appeared less concerned with the past quarter and more focused on slowing growth ahead, a worrying sign for a company whose valuation hinges on continued expansion across online betting markets.
Guidance steals the spotlight
DraftKings expects adjusted EBITDA of $700 million to $900 million for the year, missing analyst expectations of about $981 million. The weaker outlook suggests higher promotional spending, regulatory costs, or softer customer growth could weigh on profitability.
In a sector known for fierce competition and heavy marketing, even small guidance cuts can signal a tougher operating environment ahead.
Q4 performance was actually solid
Ironically, the quarter that just ended looked strong on paper. DraftKings reported revenue of $1.99 billion, matching Wall Street forecasts, while earnings per share came in at $0.25, far above the expected $0.09.
The results highlight a familiar market dynamic: stocks often trade on future expectations, not past performance. For DraftKings, solid execution today wasn’t enough to offset concerns about tomorrow.
Unless growth reaccelerates, investors may remain cautious, especially as the online betting industry matures and competition intensifies across key markets.