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DraftKings
(NASDAQ:DKNG)
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Rating:53Neutral
Price Target:
$22.50
▼(-2.22% Downside)
Action:Reiterated
Date:08/07/26
DKNG scores in the low-50s primarily due to mixed financial quality: strong cash generation and multi-year growth are offset by inconsistent profitability and a leveraged balance sheet. Technicals further pressure the score as the stock is in a clear downtrend with bearish momentum. The earnings call provides a meaningful positive counterweight via reiterated FY2026 guidance and strong unit-economics/customer metrics, but valuation remains a headwind given the very high P/E and lack of dividend support.
Positive Factors
Strong free cash flow generation
Persistent positive operating and free cash flow (TTM ~$616M) provides durable self-funding capacity for product investments and marketing, reducing reliance on external capital. This cash generation supports scaling Predictions and DKeX while cushioning earnings volatility and refinancing needs.
Negative Factors
Elevated leverage
Leverage above 3x equity increases sensitivity to operating swings and reduces financial flexibility. High debt heightens refinancing and interest-rate risk, constrains strategic optionality for M&A or buybacks, and makes the firm more vulnerable to revenue or margin softness over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
Persistent positive operating and free cash flow (TTM ~$616M) provides durable self-funding capacity for product investments and marketing, reducing reliance on external capital. This cash generation supports scaling Predictions and DKeX while cushioning earnings volatility and refinancing needs.
Read all positive factors
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 (DKNG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$22.26B
Dividend YieldN/A
Average Volume (3M)11.11M
Price to Earnings (P/E)―
Beta (1Y)1.26
Revenue Growth15.03%
EPS Growth46.89%
CountryUS
Employees5,500
SectorConsumer Cyclical
Sector Strength84
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)-0.34
Shares Outstanding496,454,040
10 Day Avg. Volume11,846,721
30 Day Avg. Volume11,106,467
Financial Highlights & Ratios
PEG Ratio34.79
Price to Book (P/B)20.25
Price to Sales (P/S)2.11
P/FCF Ratio19.74
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$32.96Price Target Upside43.24% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering26
EPS Forecast (FY)0.13
Revenue Forecast (FY)$6.69B
DraftKings Business Overview & Revenue Model
Company Description
DraftKings Inc. operates as a leading digital enterprise specializing in sports entertainment and gaming. The company provides sophisticated multi-channel sports betting and gaming technology solutions to operators across 17 countries, facilitatin...
How the Company Makes Money
DraftKings generates revenue primarily from real-money gaming offered in jurisdictions where it is licensed and regulated. Its largest revenue stream is Online Sportsbook (OSB): it earns a betting “hold” (gross gaming revenue) equal to the amount ...
DraftKings Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 30, 2026
Earnings Call Sentiment Positive
The call emphasized strong top-line and operational momentum: robust customer acquisition (nearly +75% YoY), efficient CAC (~25% better than expected), double-digit improvements in customer monetization (trailing 12-month net revenue per user +14% YoY), Sportsbook handle growth (+11% YoY) and rapid Predictions adoption (600k+ engaged, volume ~5x Apr–Jul). Management reiterated fiscal 2026 revenue and adjusted EBITDA guidance while outlining an incremental $200M–$300M investment in Predictions and continued cost discipline (adjusted G&A -6% YoY). Key challenges include a roughly $80M Q2 revenue headwind from customer-friendly sport outcomes, near-term profitability pressure from higher acquisition and material investment in Predictions, regulatory uncertainty around Predictions ramp, and some prior iGaming underperformance. On balance, the highlights — strong growth, improving unit economics, successful product launches (DKeX, combos), and scalable vertical integration — materially outweigh the near-term lowlights and volatility described.Positive Updates
Strong Adjusted EBITDA and Core Earnings Power
Generated $115 million of adjusted EBITDA in Q2 2026; management reiterates fiscal 2026 adjusted EBITDA guidance of $700M–$900M and expects the core business to generate approximately $1 billion of adjusted EBITDA in 2026.
Negative Updates
Customer-Friendly Sport Outcomes Impact
Customer-friendly outcomes in June (notably Knicks championship and World Cup group stage) created near-term headwinds — management quantified sport outcomes as roughly an $80 million revenue headwind in Q2.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Adjusted EBITDA and Core Earnings Power
Generated $115 million of adjusted EBITDA in Q2 2026; management reiterates fiscal 2026 adjusted EBITDA guidance of $700M–$900M and expects the core business to generate approximately $1 billion of adjusted EBITDA in 2026.
Read all positive updates
Company Guidance
DraftKings reiterated FY2026 guidance of $6.5–$6.9 billion in revenue and $700–$900 million in adjusted EBITDA (which already assumes ~$200–$300 million of incremental Predictions investment) and said the core business is on track to generate ~ $1.0 billion of adjusted EBITDA in 2026 after delivering $115 million of adjusted EBITDA in Q2. Key Q2 and guidance metrics: customer acquisition +~75% YoY (≈30% more customers than planned) with ~10% higher acquisition spend but ~25% better‑than‑expected CAC; monthly unique payers +9% YoY (>6% excl. World Cup customers); sports consumer volume +15% YoY; Sportsbook handle +11% YoY; normalized Q2 revenue +10% YoY; trailing 12‑month net revenue per unique customer +14% YoY in H1 2026; adjusted G&A down 6% YoY. Predictions progress cited >600,000 customers YTD, annualized total volume April–July up ~5x from $2.3B to $11B, combos ≈20% of Predictions volume, ~1% customer overlap with the largest prediction operator, and an internal estimate that 80–90% of prediction market volume in Sportsbook states comes from professional syndicates; company also noted World Cup Sportsbook handle ≈6x 2022 (≈4.5x same‑state), overall World Cup hold ~12%, and that customer‑friendly June outcomes drove roughly an $80 million revenue headwind.DraftKings Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
45
Neutral
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.22B | 6.05B | 4.77B | 3.67B | 2.24B | 1.30B |
| Gross Profit | 2.52B | 2.50B | 1.82B | 1.37B | 756.19M | 501.86M |
| EBITDA | 163.34M | 303.41M | -319.35M | -586.65M | -1.27B | -1.39B |
| Net Income | -166.90M | 3.71M | -507.29M | -802.14M | -1.38B | -1.52B |
Balance Sheet | ||||||
| Total Assets | 4.28B | 4.53B | 4.28B | 3.94B | 4.04B | 4.07B |
| Cash, Cash Equivalents and Short-Term Investments | 983.88M | 1.60B | 788.29M | 1.27B | 1.31B | 2.15B |
| Total Debt | 1.92B | 1.93B | 1.34B | 1.35B | 1.32B | 1.32B |
| Total Liabilities | 3.71B | 3.90B | 3.27B | 3.10B | 2.72B | 2.39B |
| Stockholders Equity | 569.43M | 631.46M | 1.01B | 840.31M | 1.32B | 1.68B |
Cash Flow | ||||||
| Free Cash Flow | 615.76M | 647.50M | 407.59M | -115.14M | -729.16M | -517.78M |
| Operating Cash Flow | 670.95M | 662.86M | 417.77M | -1.75M | -625.52M | -419.51M |
| Investing Cash Flow | -185.16M | -166.00M | -566.60M | -90.36M | -208.77M | -195.02M |
| Financing Cash Flow | -662.23M | -222.46M | -144.47M | -63.22M | -16.73M | 1.14B |
DraftKings Technical Analysis
Positive
23.01
Price Trends
25.21
Positive
24.67
Positive
27.00
Negative
Market Momentum
0.22
Negative
57.69
Neutral
67.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DKNG, the sentiment is Positive. The current price of 23.01 is below the 20-day moving average (MA) of 24.40, below the 50-day MA of 25.21, and below the 200-day MA of 27.00, indicating a neutral trend. The MACD of 0.22 indicates Negative momentum. The RSI at 57.69 is Neutral, neither overbought nor oversold. The STOCH value of 67.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $6.72B | 18.23 | 45.70% | 2.99% | 17.33% | 176.52% | |
72 Outperform | $5.88B | 3.56 | 70.49% | 0.87% | 1.75% | 249.96% | |
72 Outperform | $5.94B | 83.98 | 20.44% | ― | 34.29% | 14.69% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
53 Neutral | $22.26B | -77.70 | -26.30% | ― | 15.03% | 46.89% | |
52 Neutral | $2.47B | -2.94 | -48.48% | ― | 6.14% | -1168.84% |
* Consumer Cyclical Sector Average
DKNG
DraftKings
26.17
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-44.21%
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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.