DraftKings reports Q2 results this evening with shares down 16% over the past month and 11% on the week alone — the sharpest weekly drop the stock has seen in recent memory — arriving at $21.76 against a Street consensus target of $34.84, a gap that implies roughly 60% upside from current levels.
The positioning picture heading into tonight's print is notably unburdened by short-side pressure. Short interest has continued its retreat, easing to 7.9% of the free float — down roughly 5.4% from the ~41.7 million shares outstanding in mid-July. Borrowing costs have fallen 31% over the past week to just 0.30%, and availability is running above 1,000%, meaning more than ten shares sit available for every one currently borrowed. That is a loose lending market. Options traders are similarly relaxed: the put/call ratio of 0.39 is actually below its 20-day average of 0.42, sitting close to its 52-week low of 0.37. Neither shorts nor options traders are leaning defensively into the print — which makes the recent price collapse entirely fundamental in nature, not a positioning unwind.
The bull-bear divide heading into tonight is genuinely contested. Bulls point to a forward EPS growth trajectory that ranks in the 95th percentile of the broader universe year-on-year, a business with expanding market access and a "super app" strategy that could deepen monetisation per user. The analyst community has stayed firmly constructive: JP Morgan raised its target to $34 earlier in July, TD Cowen lifted to $35, and the consensus remains Buy-leaning with a mean target nearly double the current price. Bears counter that net revenue growth is decelerating, iGaming market share is under pressure from well-capitalised competitors, and near-term customer acquisition spend is a drag on margins. Stifel and Wells Fargo both trimmed targets in the past two weeks — from $40 to $38 and from $32 to $29 respectively — while keeping positive ratings, a pattern that suggests the Street sees the direction of travel on estimates as modestly lower even if the long-term case holds.
The last two quarterly prints produced a +2.1% and +6.7% one-day move respectively, suggesting the stock has historically rewarded rather than punished on earnings. But that context sits awkwardly against a 16% drawdown into this report. Tonight's numbers will test whether the revenue and margin trajectory can justify the Street's still-elevated targets — or whether the recent sell-off was pricing in something the consensus has not yet absorbed.
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