* Note: Prices are in Million (M) USD.
Description:
DraftKings Inc. is a premier digital sports entertainment and gaming company headquartered in Boston, Massachusetts, renowned for its advanced online sports betting platform and daily fantasy sports services. By harnessing innovative technology, DraftKings engages a broad spectrum of sports enthusiasts, establishing itself as a leader in the burgeoning regulated sports betting market in the United States. With a proactive approach to market expansion as additional states legalize sports wagering, DraftKings is well-positioned to seize new growth opportunities, thereby aiming for sustained long-term profitability and value creation for its shareholders.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $1,228 M
Debt : $1,847 M
EBITDA : $45 M
Net Debt (Debt - Cash): $619 M
Since EBITDA cannot cover net debt within 3 years, Avoid This Stock.
This criteria used industry in which company operates:
Sector: Arts, entertainment, and recreation
Industry: Casinos (except casino hotels)
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Message: Cannot calculate PE Ratio since EPS is either 0 or negative.
Using default values for calculation.
Forward PE Ratio (using default values): 20.00
Since Forward PE Ratio is between 20 - 25, 2 points assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 8 overlapping fiscal years (max 20).Average Free Cash Flow: $-200 M
Average Revenue: $1,666 M
Revenue Converted To Free Cash Flow (%): -12.0%
Since Free Cash Flow (FCF) to Revenue percentage is non-positive, 0 point assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $4,768 M
Revenue 5 Years Ago (2019-12-31): $323 M
Total Growth over 5 Years: 1,374.2%
5-Year Revenue CAGR (Historical): 71.3%
Forward 5-Year CAGR (Tapered): 35.6%
Since historical Revenue CAGR is greater than 20, 5 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $482 M
Share Count 5 Years Ago (2020-12-31): $306 M
Company is not buying back its own shares, 0 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $0.00
Trailing 12-Month Earnings Per Share (EPS): $0.00
Average Earnings Per Share (EPS): $0.00
Dividend Per Share (DPS): $0
Payout Ratio: 0%
Dividend Yield: 0.00%
Since Dividend Per Share is less than or equal to 0, 0 point assigned.
Since Dividend Yield is less than 1, 0 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 6 valid ROE years (max 20).Average ROE: -2,019.9%
Since Average ROE is non-positive, 0 point assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $34.54
52-Week Low: $26.23
Threshold Price (15% Above 52-Week Low): $30.16
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $17,716 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Warren Buffett's Owners' Earnings:
Owners' Earnings (FCF/Share) (TTM ending 2025-09-30): $1.28
Owners' Earnings (FCF/Share, latest positive annual) (2024-12-31): $0.85
Note: Many fast-growing companies reinvest heavily, so Owners' Earnings may appear low.
Consider other factors in your valuation.
Value-Trade has assigned 12 points to above DraftKings Inc (DKNG) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• Growth Based PE 50.00 (>2× median)
Further research is recommended; please use your own due diligence.
In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Fair Value PE 12, Industry Based PE 15, Growth Based PE 50, Risk-Free Anchored PE (25% MoS) 18.34. Based on these 4 values, average assigned is 23.83. The fair value of DraftKings Inc (DKNG) stock cannot be calculated since EBITDA and EPS are either 0 or negative.
