DraftKings (DKNG) AI Stock Analysis

• Market Cap: $29.54B
• Dividend Yield: N/A
• Average Volume (3M): 17.83M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.51
• Revenue Growth: 18.51%
• EPS Growth: 37.25%
• Country: US
• Employees: 5,100
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Gambling, Resorts & Casinos
• EPS (TTM): -0.52
• Shares Outstanding: 497,772,520
• 10 Day Avg. Volume: 11,621,422
• 30 Day Avg. Volume: 17,829,829
• PEG Ratio: 0.90
• Price to Book (P/B): 17.74
• Price to Sales (P/S): 3.76
• P/FCF Ratio: 43.99
• Enterprise Value/Market Cap: 0.65
• Enterprise Value/Revenue: 3.53
• Enterprise Value/Gross Profit: 7.41
• Enterprise Value/Ebitda: 428.76
• 1Y Price Target: $44.25
• Price Target Upside: 33.44% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 28
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 54 Neutral
• Price Target: $31.00 ▼(-6.51% Downside)

DraftKings' overall stock score is primarily influenced by its strong revenue growth and strategic initiatives, which are offset by persistent losses, high leverage, and bearish technical indicators. The negative valuation metrics further weigh down the score, despite positive sentiment from strategic partnerships and growth prospects.

Positive Factors

Revenue Growth

DraftKings' strong revenue growth projection indicates robust market demand and effective business expansion strategies, supporting long-term growth.

Strategic Partnerships

Partnerships with major media companies enhance brand visibility and customer engagement, providing a competitive edge and supporting sustained growth.

Cash Flow Management

Improved cash flow management enhances operational efficiency and financial stability, supporting long-term strategic initiatives and growth.

Negative Factors

High Leverage

High leverage poses financial risks, potentially limiting flexibility and increasing vulnerability to economic downturns, impacting long-term stability.

Profitability Challenges

Ongoing profitability challenges with negative margins indicate operational inefficiencies, which could hinder long-term financial health and growth.

Guidance Revision

The downward revision in revenue guidance reflects potential challenges in achieving growth targets, impacting investor confidence and strategic planning.

DraftKings Business Overview & Revenue Model

Company Description

DraftKings Inc. is a leading digital sports entertainment and gaming company based in the United States, operating in the online sports betting and daily fantasy sports sectors. Founded in 2012, DraftKings offers a platform that allows users to participate in fantasy sports contests and place bets on various sports events. Its core products include daily fantasy sports contests, sports betting, and a casino gaming platform, catering to millions of users across multiple states where online gambling is legal.

How the Company Makes Money

DraftKings generates revenue primarily through several key streams: entry fees from daily fantasy sports contests, sports betting operations, and online casino gaming. Users pay to enter fantasy contests, and DraftKings retains a portion of the entry fees as revenue. In the sports betting segment, the company takes a percentage of wagers placed by users, known as the 'vig' or 'juice.' Additionally, DraftKings has partnerships with various sports leagues and teams, which help drive user engagement and brand recognition, while also providing opportunities for advertising and promotional deals. The company's ability to expand into new markets and form strategic alliances with media companies further contributes to its growth and earnings potential.

DraftKings Financial Statement Overview

Summary

DraftKings shows strong revenue growth and improving cash flow metrics, indicating a solid market position. However, persistent losses and high leverage pose significant risks to financial stability. The company needs to focus on achieving profitability and reducing debt levels.

Income Statement

DraftKings has shown significant revenue growth, with a TTM increase of 89.7% compared to the previous year, indicating strong market demand and expansion. However, the company remains unprofitable with a negative net profit margin of -4.9% and an EBIT margin of -0.05%, reflecting ongoing operational challenges and high costs. The gross profit margin of 39.2% suggests some efficiency in cost management, but the negative EBITDA margin of -1.24% highlights the need for improved operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.81, indicating significant leverage and potential financial risk. The return on equity is negative at -29.5%, reflecting the company's inability to generate profits from shareholders' equity. The equity ratio stands at 15.8%, suggesting a moderate level of equity financing relative to total assets. Overall, the balance sheet shows a need for improved financial stability and reduced leverage.

Cash Flow

DraftKings has demonstrated strong free cash flow growth of 17.1% in the TTM, indicating improved cash generation capabilities. The operating cash flow to net income ratio of 0.38 suggests that the company is generating cash from operations, albeit at a lower level compared to net income. The free cash flow to net income ratio is nearly 1, indicating efficient conversion of net income to free cash flow. Despite these positive trends, the company needs to maintain consistent cash flow improvements to support its growth and reduce reliance on external financing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.46B	4.77B	3.67B	2.24B	1.30B	614.53M
Gross Profit	2.60B	1.82B	1.37B	756.19M	501.86M	267.94M
EBITDA	44.89M	-319.35M	-586.65M	-1.27B	-1.39B	-765.85M
Net Income	-267.57M	-507.29M	-802.14M	-1.38B	-1.52B	-1.23B
Balance Sheet
Total Assets	4.62B	4.28B	3.94B	4.04B	4.07B	3.44B
Cash, Cash Equivalents and Short-Term Investments	1.23B	788.29M	1.27B	1.31B	2.15B	1.82B
Total Debt	1.91B	1.34B	1.35B	1.32B	1.32B	81.61M
Total Liabilities	3.89B	3.27B	3.10B	2.72B	2.39B	807.98M
Stockholders Equity	732.29M	1.01B	840.31M	1.32B	1.68B	2.63B
Cash Flow
Free Cash Flow	619.02M	407.59M	-115.14M	-729.16M	-517.78M	-385.57M
Operating Cash Flow	667.57M	417.77M	-1.75M	-625.52M	-419.51M	-337.88M
Investing Cash Flow	-194.53M	-566.60M	-90.36M	-208.77M	-195.02M	-227.34M
Financing Cash Flow	78.63M	-144.47M	-63.22M	-16.73M	1.14B	2.31B

DraftKings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 33.16
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DKNG, the sentiment is Negative. The current price of 33.16 is above the 20-day moving average (MA) of 30.03, below the 50-day MA of 33.63, and below the 200-day MA of 38.64, indicating a neutral trend. The MACD of -0.56 indicates Negative momentum. The RSI at 58.14 is Neutral, neither overbought nor oversold. The STOCH value of 88.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DKNG.

DraftKings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SGHC	73 Outperform	$5.43B	24.87	32.35%	2.49%	29.54%	4389.69%
BYD	71 Outperform	$6.51B	3.64	87.17%	0.85%	5.91%	336.91%
RSI	67 Neutral	$4.23B	73.61	29.67%	―	23.15%	―
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
FLUT	58 Neutral	£39.10B	109.36	-2.00%	―	―	―
DKNG	54 Neutral	$29.54B	―	-29.59%	―	18.51%	37.25%
PENN	45 Neutral	$1.97B	―	-35.97%	―	8.24%	-77.54%

DraftKings Corporate Events

DraftKings Inc. Reports Strong Q3 2025 Results

DraftKings Inc. is a digital sports entertainment and gaming company that offers daily fantasy sports, regulated gaming, and digital media services, operating primarily in the U.S. and Canada.

DraftKings’ Earnings Call: Record Growth Amid Challenges

DraftKings Inc. reported a robust earnings call, showcasing a blend of strong financial performance and strategic challenges. The company celebrated record-breaking revenue and EBITDA growth, yet acknowledged hurdles such as increased tax burdens in key markets and uncertainties in prediction markets. Positive momentum was noted in strategic initiatives like live betting and iGaming, although external factors such as tax increases could pose potential headwinds.

DraftKings Reports Record Revenue and Growth in Q2

DraftKings Inc. is a digital sports entertainment and gaming company, known for its daily fantasy sports, regulated gaming, and digital media offerings, operating primarily in the sports betting industry. In its latest earnings report, DraftKings announced record-breaking revenue and Adjusted EBITDA for the second quarter, with a notable year-over-year revenue growth of 37%. The company is optimistic about maintaining its fiscal year 2025 guidance, anticipating revenue towards the higher end of its range, driven by strong business momentum and favorable sportsbook outcomes. Key highlights from the report include a significant increase in Adjusted EBITDA, which doubled the previous record, and a 45% year-over-year increase in sportsbook net revenue. DraftKings also highlighted its strategic focus on enhancing its sportsbook product for the upcoming NFL and NBA seasons and its exploration of federally-regulated Prediction Markets to enhance shareholder value. Looking ahead, DraftKings remains committed to expanding its profitability and maintaining its growth trajectory, with plans to launch mobile sports betting in Missouri and navigate higher tax rates in several states.