Stifel lowers Q3 earnings estimates for DraftKings, Flutter and others

Stifel has lowered its third-quarter earnings estimates for DraftKings, Flutter Entertainment, Rush Street Interactive and Sportradar, the investment bank said. The investment bank now expects adjusted EBITDA to fall short of Wall Street estimates at DraftKings, Flutter Entertainment, Rush Street Interactive and Sportradar.

The revisions come as Stifel estimates U.S. online sports betting handle grew 10% year over year during the third quarter. U.S. online casino gross gaming revenue grew 13% year over year in the third quarter, down from 19% growth in the first quarter, according to Stifel.

DraftKings outlook adjusted for prediction markets

Stifel cut its 2026 adjusted EBITDA forecast for DraftKings by $100 million to reflect additional prediction market spending the company signaled in September. The revised estimate sits 16% below the low end of the company’s previous guidance.

DraftKings previously outlined $200 million to $300 million in prediction market investment for 2026. Stifel expects DraftKings to maintain its roughly $1 billion core adjusted EBITDA outlook for 2026, excluding prediction market investment.

The firm projects third-quarter sportsbook net revenue hold of 6.6% for DraftKings, above Wall Street’s 6.4% estimate. Stifel maintained its buy rating on DraftKings but lowered its price target to $32 from $36.

Flutter named top pick despite EBITDA miss

Despite forecasting a 7% Q3 adjusted EBITDA miss for Flutter, Stifel named the FanDuel parent its top stock pick heading into earnings. The bank estimates FanDuel’s U.S. sportsbook handle grew 10% year over year, double Wall Street’s 5% forecast.

Flutter’s shares trade at a roughly 40% discount to DraftKings on projected 2027 EBITDA, Stifel noted. The firm maintained its buy rating on Flutter but lowered its price target to $125 from $133.

Rush Street faces potential miss streak end

Stifel expects a 2% adjusted EBITDA miss for the BetRivers parent, potentially ending a streak of 17 consecutive quarters without a miss. Rush Street Interactive’s North American revenue growth is projected to slow to 14%, from 23% in the second quarter.

Stifel maintained its buy rating while cutting Rush Street’s price target to $30 from $34, arguing the stock’s roughly 40% decline over seven weeks already reflects much of the slowdown.

Online gambling stocks have fallen sharply this year, with Stifel’s covered sportsbook and casino operators down roughly 20% to 60%. Stifel maintained its buy rating on Sportradar but lowered its price target to $17 from $18, while keeping a hold rating on Genius and cutting its target to $7 from $8.50.