Why is DraftKings stock plunging today?

DraftKings stock plunged 25.2% in after-hours trading to reach $17.60 after the company released its third-quarter 2026 results following the market close, revealing a loss and revenue figure that both fell well short of Wall Street’s expectations.

The company posted an adjusted loss of $0.53 per share against analyst estimates calling for a loss of $0.36, while quarterly revenue of $1.33 billion trailed the consensus of approximately $1.41 billion — a meaningful shortfall despite representing 16% growth from the same period a year ago.

The damage extended beyond the quarterly miss. DraftKings trimmed its fiscal year 2026 revenue guidance to a range of $6.35 billion to $6.55 billion, with a midpoint of $6.45 billion that sits below the analyst consensus of $6.65 billion, and its 2027 adjusted EBITDA outlook of $800 million to $1 billion came in well beneath the roughly $1.12 billion the market had been expecting.

A key driver of the earnings deterioration was the company’s sharply increased investment in its Predictions business, with adjusted EBITDA spending in that segment projected at $650 million to $700 million for the full year. Adjusted EBITDA for Q3 alone came in at negative $316.9 million, a steep widening from negative $126.5 million in the prior-year period.

The severity of the after-hours decline was amplified by the stock’s strong pre-earnings run. Shares had climbed roughly 20% over the six weeks heading into the report, lifted by favorable election results — particularly political shifts in Texas — and analyst expectations that a new congressional composition could ease regulatory pressure on state-licensed sportsbooks. That optimism set a high bar the results could not clear. The broader market offered no cushion, with the S&P 500, Dow Jones, and Nasdaq each finishing the regular session modestly lower.

Together, the earnings miss, the downward guidance revisions across both the near and medium term, and the unwinding of a significant pre-earnings premium combined to drive one of the stock’s sharpest single-session declines, pushing shares to $17.60 — approaching the 52-week low of $18.35 set earlier in the year.