DraftKings (DKNG)
NASDAQ:DKNG
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DraftKings
(NASDAQ:DKNG)
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Rating:61Neutral
Price Target:
$27.00
▲(18.32% Upside)
Action:ReiteratedDate:02/14/26
Improving fundamentals and strong free cash flow, reinforced by upbeat earnings-call operating momentum and FY2026 EBITDA guidance, support the score. The main offsets are elevated balance-sheet leverage and very weak technicals (clear downtrend despite oversold readings), with valuation metrics offering limited support due to a negative P/E and no dividend yield.
Positive Factors
Free Cash Flow Turnaround
DraftKings shifted to consistently strong free cash flow (~$648M in 2025). Durable positive FCF increases financial flexibility to fund product investment, share repurchases, or debt paydown, reducing refinancing risk and enabling strategic optionality over the next several quarters.
Negative Factors
Elevated Financial Leverage
Debt-to-equity near ~3.1x and materially higher absolute debt magnify downside risk if growth or margins slip. High leverage reduces flexibility for strategic moves, increases interest burden, and leaves a smaller equity cushion against shocks over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow Turnaround
DraftKings shifted to consistently strong free cash flow (~$648M in 2025). Durable positive FCF increases financial flexibility to fund product investment, share repurchases, or debt paydown, reducing refinancing risk and enabling strategic optionality over the next several quarters.
Read all positive factors
DraftKings (DKNG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$20.91B
Dividend YieldN/A
Average Volume (3M)12.86M
Price to Earnings (P/E)30.8
Beta (1Y)1.44
Revenue Growth26.99%
EPS GrowthN/A
CountryUS
Employees5,100
SectorConsumer Cyclical
Sector Strength84
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)0.25
Shares Outstanding495,742,800
10 Day Avg. Volume11,186,479
30 Day Avg. Volume12,860,373
Financial Highlights & Ratios
PEG Ratio-34.22
Price to Book (P/B)20.25
Price to Sales (P/S)2.11
P/FCF Ratio19.74
Enterprise Value/Market Cap0.56
Enterprise Value/Revenue1.95
Enterprise Value/Gross Profit4.73
Enterprise Value/Ebitda33.18
Forecast
1Y Price Target
$34.05Price Target Upside49.20% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering32
EPS Forecast (FY)0.25
Revenue Forecast (FY)$6.83B
DraftKings Business Overview & Revenue Model
Company Description
DraftKings Inc. operates a digital sports entertainment and gaming company. It offers multi-channel sports betting and gaming technologies, powering sports and gaming entertainment for operators in 17 countries. The company operates iGaming throug...
How the Company Makes Money
DraftKings generates revenue primarily from real-money gaming and related services. Its largest revenue streams are: (1) Online Sports Betting: DraftKings earns revenue from the net gaming revenue (NGR) it retains on sports wagers, which is genera...
DraftKings Key Performance Indicators (KPIs)
Any
Monthly Unique Payers
Tracks the number of distinct users placing bets each month, highlighting customer engagement and the platform's ability to attract and retain a loyal user base.
Tracks the number of distinct users placing bets each month, highlighting customer engagement and the platform's ability to attract and retain a loyal user base.
Data provided by:
The Fly
The FlyDraftKings Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call highlights a strong operational and financial quarter and year: record Q4 revenue and margin expansion, substantial adjusted EBITDA growth, first‑time GAAP net income, meaningful Sportsbook outperformance, active share repurchases, and a clear strategic push into a potentially large Predictions market with favorable regulatory movement. Offsets include conservative FY2026 guidance, prior guidance execution issues (management acknowledged a miss), early‑stage costs and uncertainty around Predictions monetization, flat overall MUPs (impacted by Jackpocket), and short‑term variance from sports outcomes. On balance, the positive results, scale, margin expansion and new growth initiatives materially outweigh the risks and near‑term costs.Positive Updates
Record Quarterly Revenue and Margin Expansion
Fourth quarter revenue grew 43% year‑over‑year to nearly $2.0 billion; adjusted EBITDA was $343 million (4x the prior year period) and adjusted EBITDA margin expanded by more than 1,000 basis points year‑over‑year to 17%.
Negative Updates
Conservative FY2026 Guidance and Implied Deceleration
FY2026 guidance is conservative relative to FY2025 performance (management intentionally lowered guide to avoid misses), implying slower revenue growth versus fiscal 2025's 27% increase; management declined to include Predictions revenue in the guide.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Quarterly Revenue and Margin Expansion
Fourth quarter revenue grew 43% year‑over‑year to nearly $2.0 billion; adjusted EBITDA was $343 million (4x the prior year period) and adjusted EBITDA margin expanded by more than 1,000 basis points year‑over‑year to 17%.
Read all positive updates
Company Guidance
DraftKings guided fiscal 2026 revenue of $6.5–$6.9 billion and adjusted EBITDA of $700–$900 million, noting those ranges reflect planned investments in Predictions, incremental marketing (tens of millions of dollars of incremental spend and some fixed head‑count costs), and line‑of‑sight jurisdiction launches (mentioned Maine iGaming and Alberta) while assuming state tax rates remain consistent; management said no material Predictions revenue was included in the guide but expects upside from that initiative and will remain active in share repurchases as adjusted EBITDA grows (16 million shares repurchased in FY2025, 8 million in Q4). The guidance is framed off a FY2025 base where revenue grew 27% to above $6 billion, adjusted EBITDA more than tripled to over $600 million (Q4 revenue nearly $2.0 billion, Q4 adjusted EBITDA $343 million and a 17% adj. EBITDA margin), and Sportsbook scale included $54 billion handle (+11% YoY for FY2025; Q4 handle +13% YoY), Q4 Sportsbook revenue of $1.4 billion (+64% YoY), Sportsbook net revenue margin up ~250 bps to 8%, parlay handle mix up ~500 bps, Q4 hold slightly above 12%, and a 2025–2026 NFL hold of 16%.DraftKings Financial Statement Overview
Summary
Income Statement
66
Positive
Balance Sheet
52
Neutral
Cash Flow
78
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 6.05B | 4.77B | 3.67B | 2.24B | 1.30B |
| Gross Profit | 2.50B | 1.82B | 1.37B | 756.19M | 501.86M |
| EBITDA | 259.67M | -319.35M | -586.65M | -1.27B | -1.39B |
| Net Income | 3.71M | -507.29M | -802.14M | -1.38B | -1.52B |
Balance Sheet | |||||
| Total Assets | 4.53B | 4.28B | 3.94B | 4.04B | 4.07B |
| Cash, Cash Equivalents and Short-Term Investments | 1.60B | 788.29M | 1.27B | 1.31B | 2.15B |
| Total Debt | 1.93B | 1.34B | 1.35B | 1.32B | 1.32B |
| Total Liabilities | 3.90B | 3.27B | 3.10B | 2.72B | 2.39B |
| Stockholders Equity | 631.46M | 1.01B | 840.31M | 1.32B | 1.68B |
Cash Flow | |||||
| Free Cash Flow | 647.50M | 407.59M | -115.14M | -729.16M | -517.78M |
| Operating Cash Flow | 662.86M | 417.77M | -1.75M | -625.52M | -419.51M |
| Investing Cash Flow | -166.00M | -566.60M | -90.36M | -208.77M | -195.02M |
| Financing Cash Flow | -222.46M | -144.47M | -63.22M | -16.73M | 1.14B |
DraftKings Technical Analysis
Negative
22.82
Price Trends
23.78
Negative
28.46
Negative
34.14
Negative
Market Momentum
-0.34
Negative
46.39
Neutral
69.39
Neutral
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 22.82 is above the 20-day moving average (MA) of 22.61, below the 50-day MA of 23.78, and below the 200-day MA of 34.14, indicating a neutral trend. The MACD of -0.34 indicates Negative momentum. The RSI at 46.39 is Neutral, neither overbought nor oversold. The STOCH value of 69.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DKNG.
DraftKings Risk Analysis
DraftKings disclosed 10 risk factors in its most recent earnings report. DraftKings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
DraftKings Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $6.59B | 14.94 | 91.63% | 0.84% | 3.45% | 272.47% | |
77 Outperform | $6.34B | 27.84 | 29.76% | 1.34% | 21.64% | 77.82% | |
75 Outperform | $5.66B | 21.20 | 27.50% | ― | 22.76% | 1215.47% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $20.91B | 30.77 | 0.46% | ― | 26.99% | ― | |
55 Neutral | $2.38B | -217.94 | -38.56% | ― | 6.38% | -1099.20% | |
52 Neutral | $19.35B | -124.17 | -3.56% | ― | 16.62% | -853.83% |
* Consumer Cyclical Sector Average
DKNG
DraftKings
23.40
-9.89
-29.71%
BYD
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86.86
18.35
26.79%
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-54.73%
RSI
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24.00
11.87
97.86%
SGHC
Super Group (SGHC)
12.34
4.56
58.53%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.