DraftKings Inc (DKNG  ) shares rose in early trading on Friday, after the company reported its second-quarter results. While the company reported its quarterly results broadly in line with expectations, its stock came under pressure just after the release as some investors had hoped management would "more fully" de-risk full-year guidance, according to BofA Securities.

The DraftKings Analyst: Analyst Shaun Kelley reiterated a Neutral rating and price target of $27.

The DraftKings Thesis: The company reported its second-quarter revenue at $1.44 billion, ahead of expectations of $1.38 billion, while EBITDA of $115 million missed BofA's estimate of $120 million, Kelly said in the note.

He added that DraftKings' revenues were driven by:

  • Sports revenue of $891 million, versus expectations of $843 million
  • iGaming revenue of $462 million, slightly ahead of the estimate of $455 million
Management reiterated their revenue guidance of $6.5-$6.9 billion and EBITDA outlook of $700-$900 million, the analyst stated.

He noted the stock came under pressure in after-hours trading on Thursday as some investors had expected management to fully reflect the following in their 2026 guidance:

  • Continued investment in prediction markets (PMs)
  • Intensifying competitive backdrop from FanDuel's step up in promotions
"Management remains confident that cannibalization from PMs to OSB (online sports betting) remains very limited with only 1% customer overlap," Kelly wrote. The analyst said he estimates the company's PM share in July at around 1.9%, largely in-line with June, and expects the share to double to around 4% in September.

"Our sense is DKNG is executing well and gaining share in core sports betting, but we still think elevated customer acquisition could weigh on 2H EBITDA," he further wrote.

DKNG Price Action: Shares of DraftKings had risen by 7.13% to $23.75 at the time of publication on Friday.