DraftKings (NASDAQ:DKNG) extended losses for the seventh consecutive session on Tuesday as its shares closed 0.89% lower at $45.91.
The company lost 3.46% in the preceding six sessions. However, on a year-to-date basis, the gaming company’s shares have gone up by more than 24% compared to an over 10% rise in the S&P500 index.
As per Seeking Alpha’s quant rating, DKNG has a Hold rating with a score of 3.17 out of 5. The company has been rated A- for growth but has scored a D- for valuation.
Seeking Alpha and Wall Street analysts, however, are bullish on the stock.
Wall Street analysts have issued a Strong Buy call for the stock. A total of 29 analysts rated the stock Buy and above, while five recommend Hold. Seeking Alpha analyst had a Buy recommendation for the stock.
This week, the stock was further dragged down after Seeking Alpha analyst Steven Fiorillo downgraded it to neutral from bullish over anticipated implications from the Big Beautiful Bill’s tax changes to recreational betting.
“Section 165(d) now limits gambling loss deductions to 90%, meaning bettors could owe taxes on money they never actually won, hurting recreational betting,” the article said.
Despite robust revenue growth, solid user acquisition, and favorable forward EPS projections, legislative risk continues to overshadow DKNG’s otherwise strong investment case, the analyst added.
However, another analyst, YR Research, reiterated their Buy rating for the stock on the back of a record Q2 revenue, strong operational leverage, and significant margin expansion, with customer growth and higher average revenue per user.
“Management’s guidance remains cautious, but I expect continued double-digit revenue growth and improving margins as DraftKings scales further,” the analyst said.