Macquarie Analyst Chad Beynon Confident in DraftKings’ Rapid Growth

Macquarie Analyst Trusts DraftKings’ Business Strategy

In a recent investor note dated May 8, Chad Beynon, an analyst from Macquarie, praised DraftKings as one of the most promising growth stories in the gambling sector today. He highlighted the company’s stronghold in both online sports betting and iGaming, noting its expanding product lineup, which now includes event contracts.

Beynon reported that DraftKings exceeded their financial forecasts for the first quarter of 2026. The company’s US revenue hit $1.6 billion, slightly above expectations by 1%, while cash flow increased by 8% to $168 million. Both revenue and cash flow showed notable double-digit growth compared to the same period in 2025.

The growth was attributed to efficient strategies in acquiring and engaging customers, along with improved sports net margins. Online sports betting handle increased by 1.5%, and its revenue surged 24% due to a tighter hold percentage. Additionally, iGaming revenue rose by 9%.

According to DraftKings’ management, cash flow would have been approximately $200 million if not for one-time expenses. These costs were linked to launching operations in Arkansas earlier this year and deploying their new prediction-market product.

Financial Outlook and Investments

DraftKings plans to invest between $200 million and $300 million in event contracts. The company anticipates an annual cash flow between $700 million and $900 million. For the full year 2026, they expect revenues to range from $6.5 billion to $6.9 billion.

Prediction Markets Drive Innovation and Revenue Growth

Beynon highlighted how DraftKings is leading in the evolving prediction markets space. Recently, the company introduced a new parlay-style feature called Combos, enabling users to purchase multiple event contracts bundled together.

The introduction of the prediction markets exchange may increase customer acquisition costs initially. However, Beynon believes this upfront investment aligns with a common growth strategy designed to ensure sustained long-term gains. He retains an “Outperform” rating on DraftKings stock, with a target price of $38 per share, compared to the trading price of $25.29 at the time of his analysis.

Ultimately, only time will reveal if Beynon’s optimistic forecast for DraftKings’ future will be realized.