A striking valuation gap has emerged between two of online gambling’s biggest names, and one Wall Street firm thinks the market has it wrong.
Flutter Entertainment’s (FLUT) shares are trading at roughly a 40% discount to DraftKings (DKNG) on projected 2027 EBITDA, a spread that Stifel argues makes Flutter its preferred holding heading into third-quarter earnings.
The broker trimmed its Flutter price target to $125 from $133 on October 25, yet held firm on its “buy” rating, projecting a 7% adjusted EBITDA miss for the quarter partly tied to the company’s exit from the Brazilian market in September.
What tempers that cautious near-term view is the underlying performance of FanDuel, Flutter’s flagship U.S. sportsbook, where betting handle is running 10% above year-ago levels against an analyst consensus of just 5% growth.
Stifel also noted that promotional spending has declined relative to handle, raising the possibility that Flutter can grow its market share without sacrificing margins to do so.
The broader sector faces a rougher earnings season, with the firm warning that poor sports outcomes, slowing online casino expansion, and investment in prediction markets are combining to pressure profitability across operators.
DraftKings saw its Stifel price target reduced to $32 from $36, with the firm forecasting online sports betting handle growth of 11%, well short of the 14% the broader analyst community expects, though a 6.6% net gaming revenue hold rate could produce a positive surprise.
The bigger drag on DraftKings is a 17.4% cut to its 2026 adjusted EBITDA estimate, driven by spending pulled forward into customer acquisition for prediction markets, even as Stifel sees the company’s roughly $1 billion core EBITDA target as intact.
Rush Street Interactive (RSI) also carries a “buy” from Stifel despite a trimmed price target of $30, down from $34, as North American revenue growth cools to an expected 14% in the third quarter after running at 23% in the second.
The firm sees RSI’s valuation, at less than eight times estimated 2028 adjusted EBITDA, as attractive relative to its growth runway in Latin America and Mexico.
Sportradar’s price target was clipped to $17 from $18, with the firm citing adverse European soccer results, the Brazil betting shutdown, and a planned divestiture of its Sports Performance business as near-term drags, while potential prediction-market data agreements offer longer-term support.
Genius Sports had its target reduced to $7 from $8.50, with Stifel maintaining a “hold” rating and flagging that a possible U.S. Supreme Court review in 2027 could limit investor appetite for the stock despite genuine revenue upside from prediction markets and Legend synergies.
At the more speculative end of the sector, Stifel kept its “buy” and $5.50 price target on Grandstand, arguing the valuation is excessively punitive given cash generation from existing revenue-sharing arrangements, though solvency concerns continue to weigh on sentiment.
Codere Online received a “hold” reaffirmation at a $10 target, with Stifel acknowledging steady business momentum in Spain and Mexico while pointing to a valuation premium over peers and unresolved Mexican regulatory questions as reasons for restraint.
Across the group, the consistent theme from Stifel is that sector turbulence is real but unevenly distributed, and Flutter’s widening discount to its closest rival represents the clearest opportunity for investors willing to look past a messy quarter.
