DraftKings stock is facing challenges amid concerns about prediction markets and sports betting. The stock is down 15.48% in the past month and 46.24% below its 52-week high. Despite the fears, data show bettors are not leaving DraftKings for companies like Kalshi, which offer event contracts. The decline in DraftKings stock is more about soft fundamentals and disappointing results rather than prediction markets.

There is a belief among sell-side analysts that the recent punishment of DraftKings and Flutter Entertainment stocks is overblown. The October sports wagering handle in New York hit a record $2.64 billion, indicating strong customer loyalty. DraftKings is facing challenges in attracting new clients and maintaining high spending rates. The company’s lack of profits and spending on marketing and customer incentives are ongoing concerns for investors.

DraftKings could rebound with a strong performance in the NFL, a successful launch in Missouri, and the introduction of DraftKings Predictions. Management’s expanded buyback program may instill confidence in shareholders. Before investing in DraftKings, consider other potential stocks recommended by The Motley Fool Stock Advisor team for potentially higher returns.

Read more at Nasdaq: What to Know Before Buying DraftKings Stock