Despite a weak showing in New York, Benchmark still has a buy rating on DraftKings stock. Here’s why.
Benchmark’s Reasoning for Buy Rating on DKNG
DraftKings Inc. (NASDAQ: DKNG) is currently trading at $30.58 as of January 26.
Last year at this time, DKNG was trading at over $41 with a 52-week high of $53.61 shortly after Super Bowl LIX.
Despite the stock volatility, Benchmark, a financial company providing equity research to hundreds of companies, still believes in DKNG. Benchmark has DKNG’s price target at $37.
Long-term growth over short-term losses is one of the main concepts that drives investors to purchase DKNG shares. DraftKings, and many other leading sportsbooks have experienced major losses, especially during the 2025 NFL season.
When the public wins big, the sportsbooks lose even bigger. In Q3, DraftKings’ losses cost the company over $300 million in revenue.
Despite the revenue losses, the total amount wagered after DraftKings increased by 10% year-over-year to $11.4 billion. DraftKings has even topped FanDuel before in sports betting. These customers suggest that there is still an appetite for sports wagering.
Is the New York Revenue Drop a Cause for Concern?
https://twitter.com/AIStockSavvy/status/2013611247636193423
In one of the country’s biggest betting markets, DraftKings lost revenue.
The New York sports betting market saw a “sharp reversal in Week 19, with handle down 2.0% YoY and revenue drop 39.9% YoY.”
The decrease can be attributed to the lower hold rate of 6.8%. Again, it comes back to the sportsbook paying out cash when the favorites win. This volatility can drive DKNG’s share price down.
The New York State Gaming Commission also reported a decline in gross gaming revenue during the NFL’s recent Wild Card weekend. This season, the gaming revenue dropped 40% compared to last year. The totals fell from $62 million last year to $37.3 million this year.
Even with the drop, Benchmark still believes in DKNG’s chance for growth due to its customer engagement.
What DraftKings is Doing to Gain an Advantage
Instead of waiting for things to turn around, DraftKings is working to create its own advantages.
DraftKings is attempting to generate higher margins through Structural Hold, a concept that maneuvers bets to favor more profitability for the operator.
Parlays are a great example of Structural Hold. Parlays are much harder to hit than straight bets because they involve multiple legs. If one leg loses, the operator collects the entire wager.
NFL parlays on DraftKings have increased by 800 basis points in recent reports, and NBA parlays have increased by 1,000 basis points YoY.
With Super Bowl LX on the horizon, expect DraftKings to ramp up its marketing, especially in the parlay department.
The Super Bowl is always the most wagered-on sporting event in the U.S.