DraftKings Inc. (NASDAQ: DKNG)

Sector: Consumer Cyclical Industry: Gambling CIK: 0001883685
Market Cap 8.38 Bn
P/B 13.27
P/E 2,259.00
P/S 1.38
ROIC (Qtr) -0.57
Div Yield % 0.00
Rev 1y % (Qtr) 42.82
Total Debt (Qtr) 1.89 Bn
Debt/Equity (Qtr) 2.99
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About

DraftKings Inc., referred to as DKNG in the stock market, is a prominent player in the digital sports entertainment and gaming industry. The company's primary business activities revolve around providing users with online sports betting, online casino, and daily fantasy sports (DFS) product offerings. DraftKings operates in various countries and regions, including the United States, Canada, and the United Kingdom. The company generates revenue through its three primary product offerings: Sportsbook, iGaming, and DFS. The Sportsbook and iGaming...

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Investment thesis

Bull case

  • Healthy cash reserves of 1.60B provide 163.82x coverage of short-term debt 9.79M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 662.86M provides exceptional 33.24x coverage of interest expenses 19.94M, showing strong debt service capability.
  • Robust free cash flow of 508.39M exceeds capital expenditure of 154.46M by 3.29x, indicating strong organic growth funding capability.
  • Operating cash flow of 662.86M fully covers other non-current liabilities 263.82M by 2.51x, showing strong long-term stability.
  • Free cash flow of 508.39M provides exceptional 25.49x coverage of interest expense 19.94M, showing strong debt service ability.

Bear case

  • Operating cash flow of 662.86M barely covers its investment activities of (166M), with a coverage ratio of -3.99, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (166M) provide weak support for R&D spending of 459.91M, which is -0.36x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 1.60B provide limited coverage of acquisition spending of (16.38M), which is -97.95x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 662.86M shows concerning coverage of stock compensation expenses of 339.31M, with a 1.95 ratio indicating potential earnings quality issues.
  • Operating earnings of 27.93M show weak coverage of depreciation charges of 275.49M, with a 0.10 ratio indicating high capital intensity and potential reinvestment needs.

Product and Service Breakdown of Revenue (2025)

Geographical Breakdown of Revenue (2025)

Peer comparison

Companies in the Gambling
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 FLUT Flutter Entertainment plc 29.14 Bn -96.80 1.89 12.68 Bn
2 DKNG DraftKings Inc. 8.38 Bn 2,259.00 1.38 1.89 Bn
3 CHDN Churchill Downs Inc 6.54 Bn 15.85 2.45 5.11 Bn
4 SGHC Super Group (SGHC) Ltd 4.77 Bn 18.81 1.88 0.08 Bn
5 BRSL Brightstar Lottery PLC 2.79 Bn -19.68 0.50 5.13 Bn
6 RSI Rush Street Interactive, Inc. 1.54 Bn 51.33 1.45 0.00 Bn
7 ACEL Accel Entertainment, Inc. 0.92 Bn 21.02 0.70 0.60 Bn
8 CDRO Codere Online Luxembourg, S.A. 0.30 Bn 251.54 1.25 -

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.89 1.38
EV to Cash from Ops. EV/CFO 12.94 9.12
EV to Debt EV to Debt 4.54 10.53
EV to EBIT EV/EBIT 307.23 41.15
EV to EBITDA EV/EBITDA 33.04 12.35
EV to Free Cash Flow [EV/FCF] EV/FCF 16.88 20.81
EV to Market Cap EV to Market Cap 1.02 -0.89
EV to Revenue EV/Rev 1.42 1.79
Price to Book Value [P/B] P/B 13.27 2.35
Price to Earnings [P/E] P/E 2,259.00 170.35
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.72
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 20.21
Dividend per Basic Share Div per Share (Qtr) 0.00 0.30
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 45.34
Interest Coverage Int. cover (Qtr) 1.40 -4.66
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -27.81 -6.60
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 20.63 43.20
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 34.14
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 102.38 339.71
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 176.79 59.74
EBIT Growth (1y) % EBIT 1y % (Qtr) 104.38 40.42
EBT Growth (1y) % EBT 1y % (Qtr) 101.34 9.08
EPS Growth (1y) % EPS 1y % (Qtr) 100.95 463.23
FCF Growth (1y) % FCF 1y % (Qtr) 71.23 -118.03
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 37.45 16.12
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.34 1.01
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.08
Cash Ratio Cash Ratio (Qtr) 0.91 0.74
Current Ratio Curr Ratio (Qtr) 1.03 1.04
Debt to Equity Ratio Debt/Equity (Qtr) 2.99 -2.16
Interest Cover Ratio Int Coverage (Qtr) 1.40 -4.66
Times Interest Earned Times Interest Earned (Qtr) 1.40 -4.66
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 5.00 -104.37
EBIT Margin % EBIT Margin % (Qtr) 0.46 -142.35
EBT Margin % EBT Margin % (Qtr) 0.13 -146.31
Gross Margin % Gross Margin % (Qtr) 41.30 44.07
Net Profit Margin % Net Margin % (Qtr) 0.10 -145.36