DraftKings Hits $3 Billion Revenue Projection, BofA Sees 30% Upside
1d ago|3 min readQuick Read
Fazen Markets Editorial Desk
Collective editorial team · methodology
draftkingssports-betting
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Bank of America announced on June 13, 2026, that it has initiated coverage on DraftKings with a buy rating and a substantial price target. The firm's analysis projects the online sports betting operator will generate $3 billion in adjusted EBITDA by 2028. The analysts see a potential 30% upside from the stock's current trading level, citing a path to accelerated market share capture in a high-growth sector. The new projection represents a significant benchmark for the company's profitability trajectory.
The U.S. online sports betting market has matured since the 2018 repeal of PASPA. It has transitioned from a land-grab phase to a focus on profitable market share. The last major investment bank upgrade for DraftKings came in late 2024, when Goldman Sachs highlighted its path to positive free cash flow. Market consolidation has left DraftKings and FanDuel as the dominant players in most major states. The current macro backdrop features stable interest rates, which has shifted investor focus toward growth stocks with clear profitability timelines. The immediate catalyst for Bank of America's analysis is DraftKings' recent first-quarter earnings report, which demonstrated stronger-than-expected customer acquisition costs and hold rates. These operational improvements underpin the more aggressive long-term financial model.
Bank of America's price target for DraftKings is set at $56 per share. This implies a 30% increase from the stock's closing price of approximately $43 on June 12. The core of the thesis is the $3 billion adjusted EBITDA projection for the 2028 fiscal year. DraftKings reported $450 million in adjusted EBITDA for the full year 2025. The projection requires a compound annual growth rate of over 45% from that base. DraftKings' market share in key states like New York and Pennsylvania has held above 30%, often challenging FanDuel for the top position. The S&P 500 has gained 8% year-to-date, while the Consumer Discretionary sector is up 5%. DraftKings has outperformed both benchmarks with a 22% year-to-date gain.
| Metric | 2025 Actual | 2028 Projection |
|---|---|---|
| Adjusted EBITDA | $450M | $3,000M |
The bullish outlook for DraftKings provides a positive read-through for the entire interactive gaming sector. Peer Penn Entertainment may see a modest lift as sentiment improves, though its own execution challenges remain a headwind. Gambling equipment suppliers like International Game Technology and Everi Holdings could benefit from increased capital expenditure budgets if operators like DraftKings continue to expand. A key limitation to the thesis is regulatory risk. New state-level tax increases or federal advertising restrictions could materially alter the profitability math. Current positioning shows institutional funds increasing their exposure to consumer discretionary names with strong digital footprints. Flow data indicates recent buying activity in DraftKings options, suggesting some traders are positioning for continued momentum.
Investors should monitor DraftKings' second-quarter earnings report, scheduled for early August 2026. Any deviation from the projected customer acquisition cost efficiency will be scrutinized. The next major catalyst is the potential launch of online sports betting in California, with legislative discussions ongoing for a 2027 ballot initiative. Key technical levels to watch include the $50 psychological resistance level and the 50-day simple moving average, currently near $41, which has acted as support. Should the company reaffirm its 2026 EBITDA guidance during the next earnings call, the stock will likely test the $48-$50 range. A break below $38 would invalidate the near-term bullish momentum and signal a reassessment of growth assumptions.
Bank of America's call is a significant institutional endorsement, but it is not a guarantee of performance. The investment thesis hinges on DraftKings executing a multi-year plan to dramatically expand profitability while maintaining market share. Retail investors should consider the stock's volatility, its high valuation multiples relative to current earnings, and the sector's regulatory risks before making any decision. This analysis is best viewed as a data point within a broader due diligence process.
The $3 billion EBITDA target would place DraftKings among the more profitable digital entertainment firms. For comparison, Live Nation Entertainment reported approximately $2.1 billion in adjusted EBITDA for 2025. Achieving this target would mean DraftKings generates higher operating profit than many traditional media and leisure companies, justifying a premium valuation if the growth trajectory remains intact.
The primary risks are intensifying competition, which could force higher marketing spending, and regulatory changes. State legislatures may impose higher tax rates on gross gaming revenue to fund budget shortfalls, directly reducing EBITDA margins. A broader economic recession could also dampen discretionary spending on sports betting. DraftKings' success assumes no major federal intervention restricting online gambling advertising or deposit methods.
Bank of America's $3 billion EBITDA target sets a new benchmark for DraftKings' financial ambition and market credibility.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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