DraftKings Inc. (DKNG)
UndervaluedFundamental
51
Price
$19.02
Market Cap
$10.56B
Part 1 · What the company is worth
Overview
DraftKings runs mobile sports betting (Sportsbook) and online casino games (iGaming) in states and countries where they are legal, plus daily fantasy sports contests, a digital lottery courier service, and a newer prediction-markets product. Users open the DraftKings app, deposit money, and place bets on sporting events or play casino games; the company sets the odds or house edge and earns the difference between what is wagered and what it pays out to winners.
How it makes money
Revenue is the amount wagered (handle) multiplied by the net revenue margin DraftKings keeps after paying out winning bets and promotional credits, plus a similar take rate on iGaming wagers. Because online betting is legalized state by state, a large part of revenue growth comes from newly opened markets maturing rather than from existing users betting more, and heavy promotional spending to win and keep bettors remains one of the company's largest costs.
Revenue by segment
Mobile sports wagering and online casino games, together the large majority of revenue across regulated US states and Ontario, Canada.
Daily fantasy sports contests, a digital lottery courier service, and the newly launched prediction-markets vertical.
Competitive moat
Brand · NarrowDraftKings and FanDuel dominate US online betting, and reaching that scale required years of state-by-state licensing and heavy marketing spend few new entrants can match. That advantage is only narrow, though: bettors routinely hold accounts on multiple apps and chase the best odds or bonus, so brand loyalty alone does little to stop them from betting elsewhere too.
What drives demand
CyclicalBetting is discretionary spending that rises and falls with household budgets, and DraftKings' growth today depends heavily on new states legalizing online sports betting and iGaming, a process that can stall for years in any given state. Once a state is mature, revenue growth slows to the pace of existing bettors' spending rather than new-market expansion.
Key risks
- Intense competition — FanDuel and other operators compete aggressively on odds, promotions and product features; DraftKings must keep spending to retain market share in a business where switching between apps costs a bettor nothing.
- Regulatory and legalization uncertainty — Online sports betting and iGaming remain illegal in a large share of US states, and existing laws and tax rates can change; growth assumes legalization keeps expanding on the timeline the company expects.
- Cybersecurity threats — The platform handles customer funds, personal data and payment information; a breach could disrupt operations, trigger regulatory penalties and damage the trust the betting product depends on.
- Dependence on app store distribution — The DraftKings app is distributed mainly through Apple's App Store and Google Play; changes to their rules, fees or approval decisions could restrict how customers reach the product.
- Sensitivity to discretionary spending — Betting and casino play are among the first expenses households cut when money is tight, so a weaker economy or falling consumer confidence directly reduces how much customers wager.
The case for
Buyers argue that Sportsbook and iGaming margins are structurally improving as promotional spending eases and legal markets mature, and that DraftKings, as one of only two national-scale operators alongside FanDuel, is positioned to keep capturing a duopoly's share of a growing legal betting market.
The case against
Sellers fear that new state tax increases, promotion-driven price competition, and bettors who freely hold accounts on multiple apps could keep margins thinner than the current growth numbers suggest, especially once the easiest state legalizations are behind the industry.
Written by the editors, published on August 18, 2026
Direct competitors
Who this company fights with for the same customers
Generated on September 18, 2026 with claude-haiku-4-5 — shared with all users
Its FanDuel brand is the other half of the U.S. online sportsbook duopoly, competing state by state for the same bettors across sports betting, iGaming and daily fantasy sports.
Caesars Sportsbook and Caesars Palace Online Casino compete in the same regulated U.S. states, using the group's land-based casino loyalty programme to win the same digital customers.
Through ESPN Bet and Hollywood Casino online, it competes for the same American online sports betting and iGaming revenue, leaning on the ESPN media partnership for customer acquisition.
The joint venture between MGM Resorts International and Entain runs the third-largest U.S. online sportsbook and casino, chasing the same regulated American players with the same promotional offers.
The privately held sports-merchandise group turned its retail customer base into a sportsbook and iGaming operation that has climbed to roughly 7% of U.S. handle, competing directly for the same fans.
Its BetRivers brand operates online sportsbooks and casinos in many of the same U.S. states, and is a smaller but direct rival for the same regulated players.
Balance Sheet & Liquidity
Revenue
$6.22B
Trailing 12 months (through 6/30/2026)
Net Income
$-167M
Trailing 12 months (through 6/30/2026)
Free Cash Flow
$648M
Total Equity
$631M
Total Liabilities
$3.90B
Current Ratio
1.02
Interest Coverage
-
Debt/EBITDA
5.17
Earnings Per Share
Revenue & Net Income
Free Cash Flow
Income Breakdown
Historical statement
Margins over time
Debt over time
How heavy the debt is
Growth grid
Growth — Revenue
Fair Value Estimation
Fair Value
$35.12
Current Price
$19.02
Margin of Safety
+45.9%
Fair Value Range
$33.36 - $36.87
Spread across the valuation methods used, not a statistically calibrated confidence interval.
Estimation Methods
Valuation Metrics
P/E Ratio
-
ROE
0.6%
P/B Ratio
16.57
P/FCF
14.49
Gross Margin
40.5%
ROIC
-5.3%
Profitability Radar
Value Creation (Economic Moat)
ROIC
-5.3%
WACC
12.2%
ROIC − WACC
-17.5 pp
ROIC is below the cost of capital — the company is destroying value for every dollar invested.
Fundamental Analysis Criteria
Passed (13)
- EPS shows upward trend
- Price CAGR 10.30%
- Gross Margin 40.5%
- P/FCF 14.49
- Positive Free Cash Flow
- CapEx intensity
- Current Ratio
- Debt/EBITDA
- Revenue Growth 5Y 58.0%
- Analyst Consensus 78% Buy
- Share Dilution -176.8%
- Net Margin Trend -2.7% vs -5.6%
- Piotroski F-Score 8/9
Failed (9)
- ROIC -5.3%
- P/B Ratio 16.57
- Debt/Equity ratio
- Operating Margin -2.9%
- Return on Tangible Assets
- Low reliance on intangibles
- DCF valuation (Unknown)
- ROE -26.3%
- Earnings Surprise avg -160.6%
Unavailable (5)
- Dividend Payout NaN%
- Interest Coverage
- Price below Graham Number
- PEG Ratio (need PE > 0 and growth > 0)
- Earnings Quality (OCF/Net Income)
Piotroski F-Score
Strong financial health
Earnings Quality
Low quality: investigate accounting
Share Dilution
Buying back shares. Shareholder friendly
Institutional Holdings
Governance
Executive Team
| Name | Title | Age |
|---|---|---|
| Mr. Jason D. Robins | Co-Founder, Chairman & CEO | 44 |
| Mr. Paul Liberman | Co-Founder, President of Operations and Director | 41 |
| Mr. Matthew Kalish | Co-Founder & Director | 43 |
| Mr. Alan Ellingson | CFO, Principal Financial Officer & Principal Accounting Officer | 45 |
| Mr. R. Stanton Dodge Esq. | Chief Legal Officer & Secretary | 57 |
| Mr. Erik Bradbury | Chief Accounting Officer | 47 |
| Zach Maybury | Chief Technology Officer | - |
| Michael DeLalio | Senior Director of Investor Relations | - |
| Ms. Jennifer Aguiar | Chief Compliance Officer | - |
| Ms. Stephanie Agrimanakis Sherman | Chief Marketing Officer | - |
Audit Risk
7
Board Risk
10
Compensation Risk
9
Shareholder Rights Risk
10
Part 2 · The price and when to enter
This part won't tell you whether the company is worth owning: it helps you choose when to buy it, once the fundamentals have convinced you. Inside: technical analysis, potential, historical drawdowns, gamma exposure.
Documents
- View document
Annual Report (10-K)
A yearly overview of the business, its financial results, and the risks it faces.
Filed on 2026-02-13
- View document
Quarterly Report (10-Q)
A snapshot of financial performance for the most recent three-month period.
Filed on 2026-08-07
- View document
Current Report (8-K)
An announcement of a major event, such as a leadership change or big news.
Filed on 2026-09-25
via SEC EDGAR
Income History
via SEC EDGAR
Latest News
Recent headlines for DKNG, sourced from Markets Gazette.
- 1d agoNEGATIVE“We Are In an Era of Warped Entrepreneurship,” Says Makunda
A New York Times investigation revealed DraftKings Inc. utilized a machine-learning model to score customers based on their potential losses from free bets and bonuses. This practice has sparked concerns about the company targeting problem gamblers, with internal analysis suggesting that 'a problem gambler' represented the 'best investment' due to financial metrics. Gautam Mukunda, a Bloomberg News Opinion Contributor, critiques this as 'warped entrepreneurship' and advocates for regulations against predatory capitalism to foster socially beneficial business practices. Investors should monitor potential regulatory scrutiny and reputational damage.
- 13d agoNEGATIVELe azioni DraftKings soffrono per i mercati predittivi nonostante il CEO
DraftKings shares are experiencing further declines, pressured by the rise of predictive markets, notably Kalshi. Kalshi's surge in sports betting volume with the NFL season's start is diminishing the short-term appeal of DKNG stock. This trend of predictive markets gaining popularity has impacted DraftKings negatively throughout 2026, resulting in a nearly 40% drop from the year's start. The current sell-off challenges recent reassurances from CEO Jason Robins, who previously dismissed competitive concerns from these platforms.
- 21d agoPOSITIVEPrediction Markets Are Huge Opportunity, DraftKings CEO Says
DraftKings CEO Jason Robins highlighted significant growth across all company products, identifying prediction markets as a substantial future opportunity. This strategic focus on emerging markets and continued expansion of existing offerings suggests a positive outlook for the company's revenue streams and market position. Investors may see this as a sign of innovation and potential for increased market share, which could translate into stock appreciation.
- 8/26/2026NEGATIVEExclusive: Struggling DraftKings awards $30 million marketing contract to cofounder who recently stepped down
DraftKings has awarded a marketing contract valued at potentially millions to HardScope, a startup founded by Matthew Kalish, who recently stepped down from his executive role at the company. The agreements were signed just six weeks prior to Kalish's departure. This move raises governance concerns and questions about the allocation of company resources, especially given DraftKings' ongoing efforts to achieve profitability. Investors may view this as a potential misuse of funds or a conflict of interest, which could negatively impact the stock's perception and valuation.
- 8/7/2026NEUTRALDraftKings CEO Blasts Prediction Bets on Earnings Call Comments
DraftKings CEO Jason Robins expressed disapproval of prediction market wagers placed on executive comments during earnings calls. Robins stated that such betting is not beneficial for the company. While this comment does not directly impact DraftKings' financial performance or operational outlook, it highlights a potential concern for management regarding market speculation on executive statements. Investors may view this as a minor distraction, but it does not currently present a clear positive or negative signal for the stock.
- 8/6/2026NEGATIVEDraftKings Sales, Profit Fall Short Amid Prediction Market Blitz
DraftKings Inc. reported second-quarter results that fell short of analyst expectations, signaling potential headwinds for the sportsbetting giant. The company's performance was impacted by increased competition from emerging prediction market platforms, which are capturing a share of the betting landscape. This miss suggests that DraftKings may need to adapt its strategy to counter new competitive pressures and maintain its market dominance. Investors will be closely watching the company's response and future guidance.
- 8/6/2026POSITIVEOption Traders Pile Into Bullish DraftKings Bets Before Earnings
Ahead of DraftKings' upcoming earnings report, a significant influx of options trading activity indicates a bullish sentiment among traders. The increased volume in call options suggests a market expectation for positive performance or a favorable outlook from the sports betting company. This heightened interest, driven by anticipation of strong results, could precede a notable upward movement in the stock price if the earnings meet or exceed these optimistic projections. Investors will be closely watching the earnings call for confirmation of this bullish thesis.
- 6/13/2026NEUTRALDraftKings and Flutter Jump as World Cup Continues, But Key Risk Remains
DraftKings and Flutter Entertainment stocks are experiencing upward momentum, coinciding with the ongoing World Cup, a period typically associated with increased sports betting activity. However, this positive trend is tempered by the emerging threat of prediction markets, which could represent a structural shift in the market and a long-term risk to traditional sports betting operators. Investors are weighing the short-term gains from major sporting events against the potential disruption from new market entrants and evolving consumer preferences.
via Markets Gazette