BofA analyst Shaun C. Kelley reiterated a Buy rating on DraftKings Inc. (NASDAQ:DKNG) stock on Tuesday, with a price forecast of $60.00.

The company is scheduled to release its first-quarter earnings on May 8. Ahead of its earnings report, DraftKings is expected to face investor scrutiny on its 2025 guidance and betting volume momentum.

The analyst has reduced the first-quarter EBITDA projections to $120 million from $149 million due to the lower hold during March Madness.

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Despite this, the full-year outlook remains intact, supported by a strong Super Bowl performance. However, the analyst noted that a ban on Texas Jackpocket could pose a $30 million EBITDA risk, possibly prompting a guidance trim to $920 million.

Market-wide same-state sports betting handle growth slowed to 9% year-over-year in the first quarter of 2025, down from 11% in the fourth quarter and 23% in the third quarter.

This deceleration and the rise of prediction markets have created uncertainty around DraftKing's forecast for mid-to-high teens growth.

While some attribute the slowdown to fewer promotions or more parlay bets, the analyst says these factors are already reflected in the company's guidance.

DraftKing's 2025 EBITDA forecast of $900 million to $1 billion currently excludes potential impacts from Missouri's sports betting rollout, possible state tax hikes, and the recent shutdown of Jackpocket in Texas.

The analyst suggests the company might revise its revenue and EBITDA guidance downward by $50 million and $30 million, respectively, due to Jackpocket.

Additionally, new taxes in states like New Jersey, Maryland, and North Carolina could pose a $60 million challenge, while Missouri's delayed launch may add $35 million.

Price Action: DKNG shares closed higher by 3.18% to $33.47 on Tuesday.

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