Macquarie Analyst Chad Beynon Says DraftKings Will Continue Growing Fast

In a May 8 investor note, Macquarie analyst Chad Beynon explained that DraftKings has seen one of the most compelling structural growth stories in the gambling industry in recent times.

Macquarie Analyst Has Faith In DraftKings’ Business Model

Beynon highlighted DraftKings’ leadership in both online sports betting and iGaming, emphasizing the company’s expanding range of offerings, which now includes event contracts. The analyst also noted that DraftKings exceeded its revenue and cash flow projections in the first quarter of 2026. US revenues reached $1.6 billion, slightly surpassing expectations by 1%, while cash flow came in at $168 million, an 8% increase. Both figures marked double-digit growth compared to the first quarter of 2025.

According to Beynon, the results were driven by efficient customer acquisition, strong customer engagement, and higher sports net margins. He noted that handle from online sports betting rose 1.5%, while revenue jumped 24% due to a tighter hold. iGaming revenues increased by 9%.

DraftKings’ management said cash flow would have reached $200 million if not for one-time expenses. These included costs associated with launching operations in Arkansas earlier this year and rolling out its prediction-market product.

The company expects its investment in event contracts to total between $200 million and $300 million. It also projected an annual cash flow of at least $700 million, with the potential to reach as much as $900 million. For 2026, DraftKings guided revenue to be in the range of $6.5 billion to $6.9 billion.

Prediction Markets Have So Far Played Out In Favor of DraftKings

On the topic of prediction markets and how they helped DraftKings’ revenue, Beynon reported that the field is rapidly evolving. DraftKings has been at the forefront of this new wave with its various prediction market offerings. For example, a few weeks ago, the company announced a new parlay-style feature called Combos, which allows multiple event contracts to be purchased as one bundle. 

Furthermore, Beynon added that the introduction of the prediction markets exchange would likely result in higher customer acquisition costs. Beynon observed that this strategy follows a familiar playbook, where upfront investment helps secure long-term growth. He maintained an “Outperform” rating on the stock with a price target of $38 per share. At the time of reporting, DraftKings was trading at $25.29 per share.

Time will tell if Beynon’s predictions for DraftKings will become true.