DraftKings (DKNG) AI Stock Analysis

• Market Cap: $27.21B
• Dividend Yield: N/A
• Average Volume (3M): 18.85M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.75
• Revenue Growth: 25.80%
• EPS Growth: 27.64%
• Country: US
• Employees: 5,100
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Gambling, Resorts & Casinos
• EPS (TTM): 0.30
• Shares Outstanding: 496,470,060
• 10 Day Avg. Volume: 17,992,791
• 30 Day Avg. Volume: 18,852,244
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.86
• Enterprise Value/Revenue: 4.32
• Enterprise Value/Gross Profit: 10.94
• Enterprise Value/Ebitda: -333.59K
• 1Y Price Target: $50.99
• Price Target Upside: 66.69% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 27

• Rating: 50 Neutral
• Price Target: $33.00 ▲(7.88% Upside)

DraftKings' overall score is driven by strong revenue growth and positive earnings call guidance. However, significant financial risks due to high leverage, negative profitability, and bearish technical indicators weigh heavily on the score.

Positive Factors

Revenue Growth

Strong revenue growth demonstrates robust market demand and effective business strategies, indicating potential for sustained expansion.

Strategic Partnerships

This partnership enhances brand visibility and user engagement, leveraging NBCUniversal's extensive reach to strengthen DraftKings' market position.

Cash Flow Management

Improved cash flow management enhances financial stability and operational efficiency, providing more resources for strategic investments.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, potentially impacting the company's ability to invest in growth opportunities.

Profitability Challenges

Ongoing profitability challenges may hinder long-term growth and shareholder value, requiring strategic adjustments to improve margins.

Higher Tax Rates

Increased tax rates could reduce net income and cash flow, affecting profitability and potentially limiting future investment capabilities.

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 through its DraftKings brand in 5 states, as well as operates Golden Nugget Online Gaming, an iGaming product and gaming brand in 3 states. Its Sportsbook is live with mobile and/or retail betting operations in the United States pursuant to regulations in 18 states. The company's daily fantasy sports product is available in 6 countries internationally with 15 distinct sports categories. In addition, it offers DraftKings Marketplace, a digital collectibles ecosystem designed for mainstream accessibility that offers curated NFT drops and supports secondary-market transactions, as well as owns Vegas Sports Information Network (VSiN), a multi-platform broadcast and content company. DraftKings Inc. was founded in 2011 and is headquartered in Boston, Massachusetts.

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 but struggles with profitability due to negative margins. The high debt-to-equity ratio indicates financial risk, though improvements in cash flow management provide a positive outlook.

Income Statement

DraftKings shows a positive revenue growth trend with an 8.16% increase in TTM, indicating strong market demand. However, the company struggles with profitability, as evidenced by negative net and EBIT margins, reflecting ongoing operational challenges.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.32, suggesting significant leverage and potential financial risk. The negative return on equity indicates that the company is not generating profit from its equity base, which is a concern for investors.

Cash Flow

Cash flow analysis shows improvement with a 41.96% growth in free cash flow, indicating better cash management. The free cash flow to net income ratio above 1 suggests efficient cash generation relative to net income, despite negative operating cash flow coverage.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.41B	4.77B	3.67B	2.24B	1.30B	614.53M
Gross Profit	2.13B	1.82B	1.37B	756.19M	501.86M	267.94M
EBITDA	-70.00K	-319.35M	-586.65M	-1.27B	-1.40B	-729.44M
Net Income	-304.47M	-507.29M	-802.14M	-1.38B	-1.53B	-843.70M
Balance Sheet
Total Assets	4.47B	4.28B	3.94B	4.04B	4.07B	3.44B
Cash, Cash Equivalents and Short-Term Investments	1.26B	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	3.46B	3.27B	3.10B	2.72B	2.39B	807.98M
Stockholders Equity	1.01B	1.01B	840.31M	1.32B	1.68B	2.63B
Cash Flow
Free Cash Flow	558.75M	407.59M	-115.14M	-729.16M	-517.78M	-385.57M
Operating Cash Flow	513.68M	417.77M	-1.75M	-625.52M	-419.51M	-337.88M
Investing Cash Flow	-184.34M	-566.60M	-90.36M	-208.77M	-195.02M	-227.34M
Financing Cash Flow	161.14M	-144.47M	-63.22M	-16.73M	1.14B	2.31B

DraftKings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 30.59
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

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 30.59 is below the 20-day moving average (MA) of 33.16, below the 50-day MA of 39.39, and below the 200-day MA of 39.72, indicating a bearish trend. The MACD of -2.29 indicates Positive momentum. The RSI at 29.25 is Positive, neither overbought nor oversold. The STOCH value of 11.28 is Positive, 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
BYD	―	$6.24B	3.40	87.17%	0.91%	5.91%	336.91%
RSI	―	$3.89B	67.70	29.67%	―	23.15%	―
SGHC	―	$5.42B	40.89	21.44%	2.50%	26.85%	1963.28%
Sector *	―	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
FLUT	―	£44.35B	124.06	3.76%	―	―	―
DKNG	―	$27.21B	―	-26.38%	―	25.80%	27.64%
PENN	―	$2.40B	―	-2.50%	―	7.34%	93.83%

DraftKings Corporate Events

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.