As of May 22, 2025, Draftkings Inc has a Discounted Cash Flow (DCF) derived fair value of $12.11 per share. With the current market price at $35.54, this represents a potential upside of -65.9%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $0.00 |
| DCF Fair Value (10-year) | $12.11 |
| Potential Upside (5-year) | -177.3% |
| Potential Upside (10-year) | -65.9% |
| Discount Rate (WACC) | 6.1% - 8.4% |
Revenue is projected to grow from $4768 million in 12-2024 to $46140 million by 12-2034, representing a compound annual growth rate of approximately 25.5%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 4768 | 30% |
| 12-2025 | 5716 | 20% |
| 12-2026 | 7760 | 36% |
| 12-2027 | 10727 | 38% |
| 12-2028 | 14134 | 32% |
| 12-2029 | 18290 | 29% |
| 12-2030 | 22668 | 24% |
| 12-2031 | 27793 | 23% |
| 12-2032 | 33304 | 20% |
| 12-2033 | 39813 | 20% |
| 12-2034 | 46140 | 16% |
Net profit margin is expected to improve from -11% in 12-2024 to 4% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | (507) | -11% |
| 12-2025 | (527) | -9% |
| 12-2026 | (491) | -6% |
| 12-2027 | (383) | -4% |
| 12-2028 | (134) | -1% |
| 12-2029 | 281 | 2% |
| 12-2030 | 456 | 2% |
| 12-2031 | 689 | 2% |
| 12-2032 | 980 | 3% |
| 12-2033 | 1354 | 3% |
| 12-2034 | 1779 | 4% |
with a 5-year average of $81 million. Projected CapEx is expected to maintain at approximately 4% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 120 |
| 12-2026 | 171 |
| 12-2027 | 240 |
| 12-2028 | 335 |
| 12-2029 | 464 |
| 12-2030 | 603 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 6 |
| Days Inventory | 0 |
| Days Payables | 5 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | (351) | (5) | 176 | 32 | (553) |
| 2026 | (398) | (6) | 318 | (7) | (702) |
| 2027 | (248) | (5) | 440 | 21 | (703) |
| 2028 | 68 | (2) | 579 | 40 | (549) |
| 2029 | 579 | 4 | 750 | 23 | (197) |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 0.00 | -177.3% |
| 10-Year DCF (Growth) | 12.11 | -65.9% |
| 5-Year DCF (EBITDA) | 0.00 | -100.0% |
| 10-Year DCF (EBITDA) | 12.71 | -64.2% |
Is Draftkings Inc (DKNG) a buy or a sell? Draftkings Inc is definitely a sell. Based on our DCF analysis, Draftkings Inc (DKNG) appears to be overvalued with upside potential of -65.9%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider reducing exposure at the current market price of $35.54.