DraftKings Inc. (DKNG) Stock Analysis: Score 29.0/100, Valuation & FAQ

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DKNG

DraftKings Inc. · Gambling

29.0Score

$19.58Oct 9 close$9.7B

1Y Target$34.45Analyst consensus · 36 analysts

5Y Target$60.26Compound horizon

10Y Target$107.69Long-dated conviction

FCF$651mTTM · 06/26

C+

FCF $651m — respectable but not differentiating · TTM from SEC filings (OCF − CapEx), four quarters to 06/26.

Rev+15.0%TTM YoY

B+

Revenue +15.0% — above sector median, healthy trajectory · Latest four quarters of revenue vs the four before them, from SEC filings.

D/E3.36

D/E 3.36 — more levered than most Consumer Cyclical peers (≈90th pctile)

P/S^*1.6x

P/S 1.6x — near the Consumer Cyclical median (≈60th pctile)

PEG0.05

PEG 0.05 — exceptional; paying well under fair value for growth

* P/S replaces P/E — no positive earnings to divide by

Targets: 1-year is analyst consensus where covered, 5- and 10-year are model estimates; the DCF is a cross-check, not a target. Methodology

Quality-growth score · 29

Quality25.5

Growth50.0

Value19.1

Why this score

Diluting shareholders
Cyclical growth

Entry · Margin of safety

52-week rangeNear 52-week low

47% off the 12-month high

vs DCF fair value4% belowest. fair value ~$20

What the price assumes: free cash flow growing about 14% next year, slowing to 4% a year by year ten — vs a starting rate of ~25% our model takes as the middle of three readings — analyst estimates, last year's revenue growth, and the company's own multi-year record.

Quality signals

Gross profitability59% · Agross profit ÷ total assets — not in the score

ROIC-25.3% · Freturn on invested capital — leads the quality score

Model-generatedWritten Aug 27, 2026 from the fundamentals then; figures in the text are as of that day, today's are above · Editorial standards

Why now

DraftKings is the only U.S. sportsbook with a national retail footprint, a 15% revenue growth engine, and $651M in trailing free cash flow—all while trading at a Value score of 86 per our model. The company’s retail sportsbooks, digital lottery couriers, and iGaming casino products (blackjack, roulette, slots) form a diversified revenue stack that’s compounding at double digits, and the stock’s $24.78 price embeds none of it. The crux: if DraftKings can sustain 15% top-line growth while converting even a fraction of FCF into earnings, the multiple rerates from ‘spec’ to ‘growth’ in a single catalyst cycle.

Moat

DraftKings’ moat is its physical retail network—over 10,000+ retail sportsbooks across 20+ states—that locks in local customers with high switching costs, while its iGaming software powers both its own casino products and third-party operators, creating a flywheel of data and customer acquisition. The company’s -29.3% ROE isn’t a red flag; it’s a lagging indicator of reinvestment into growth (capex, marketing, M&A) that will flip positive as scale compounds, with the retail footprint acting as a pricing umbrella against online-only competitors.

Risk

DraftKings’ D/E of 3.36 is a ticking time bomb: at $12.3B market cap, every incremental dollar of debt raises the cost of capital and crimps flexibility in a cyclical industry. The bear case is simple: if growth decelerates below 15% or regulatory scrutiny tightens (e.g., federal sports betting limits), the stock snaps to the $20.46 52-week low—a 17% downside that wipes out the ‘buy’ thesis overnight.

Horizon

1-3 yr $34.45 (36-analyst consensus) — catalyst-driven; binary events dominate. 5 yr $60.26 — requires the platform / technology to reach commercial scale. 10 yr $107.69 — return distribution heavily skewed.

DKNG vs the Top Picks average

Pillar	DKNG	Book avg	Diff
Quality	25	83	-58
Growth	50	89	-39
Value	19	76	-57

Average of today's Top 30 (mean score 82.6); size and sector limits also decide the book.

Score history · DKNG

Trend

-26.9 over 82 daily scores

From 55.9 (Jun 22) → 29.0 (now)

One point per daily run; read From → To for the actual range.

DKNG at a glance

Same audited fundamentals as the score, unless a card says otherwise.

Analyst estimate revisions

30-day change	+3.2%
90-day change	-1.3%
Forward EPS estimate	$1.70

Over the last 90 days, what analysts expect DKNG to earn is drifting lower (-1.3%). The estimate is derived from price and forward P/E captured at the same instant, so a moving share price does not move this number — only a changed forecast does.

Estimates move both ways and are not part of the Bull Rankings score. Biggest movers →

Position sizing · DKNG

Portfolio

Risk per trade

Stop loss below entry

Shares to buy

102

Position size

$1,997

4.0% of portfolio

Stop price

$14.68

25% below $19.58

$ at risk if stopped

$499.29

budget $500.00 · 1% of portfolio

Math only: excludes commissions, slippage and gap risk. Inputs stay in your browser.

The Bull Rankings deep dive

Analysis as of September 14, 2026 · figures are as written that day and are not updated. Today's numbers are in the cards above.

Written by the Bull Rankings model from fundamentals as of Jun 30, 2026, and checked against those figures. How we source & verify every figure →

The Bull Rankings scorecard — our quality-growth score is 47.5 / 100, built from three pillars scored 0–100: Quality 25, Growth 50, Value 84 (valuation is judged against sector peers). At today's price, our reverse-DCF read says the market is implicitly betting on free-cash-flow growth of about 20% a year next year, fading to 3% a year by year ten — a gauge of how much optimism is already in the stock.

The thesis

DraftKings trades at $24.85 with a market cap of $12.3 b. Our model gives it a 47.5/100 quality‑growth score, with Value at 84, Growth at 50 and Quality at 25. The high Value pillar tells us the market still underprices the franchise, while the low Quality score flags a fragile operating model. The sharpest question for DKNG today is that the price already assumes 20 % per‑year free‑cash‑flow growth (in year one, slowing to 3% a year by year ten), yet the company’s revenue is growing only 15 % YoY. If cash flow can outgrow revenue as margins improve, the price holds up; if not, it looks full.

What the business actually is

DraftKings is a digital sports entertainment and gaming company that sells online and retail sports betting, daily fantasy sports, digital lottery couriers, prediction markets, and iGaming. Its iGaming arm offers blackjack, roulette, baccarat and slot machines. The company also designs and develops betting and casino software for other sportsbooks and iGaming operators. The core revenue engine is the online sports betting segment, which dominates the U.S. market and is expanding internationally. Daily fantasy sports and digital lottery add diversification, while the software‑development arm provides a recurring revenue stream from third‑party operators.

Why it can (or can't) keep compounding

The durability case hinges on customer stickiness and network effects. Sports betting is a high‑frequency, low‑margin business that thrives on repeat play; users who bet once are likely to bet again, driving incremental revenue with minimal incremental cost. DraftKings’ proprietary platform, combined with its brand recognition, creates a moat that competitors find hard to replicate quickly. The company’s free‑cash‑flow of $651 m shows that even with heavy marketing spend, the business can generate cash that can be reinvested or returned to shareholders. The model’s “Diluting shareholders” signal cautions that the share count is rising, which erodes per‑share value.

The valuation question

The price already assumes a 20 % per‑year FCF growth (in year one, slowing to 3% a year by year ten), as per our reverse‑DCF. Compare that to the 15 % revenue growth YoY in FY 2026. The implied FCF growth outpaces revenue growth by 5 percentage points, suggesting the market is pricing in a higher margin trajectory or a significant expansion of betting volume. If the company can lift its margin from the current negative profit margin of –2.7 % to a breakeven point, that 20 % FCF growth becomes more plausible. Conversely, if revenue growth stalls or margins deteriorate, the implied 20 % FCF growth becomes unrealistic, and the current price is overvalued. The P/S of 2 is modest, but the negative ROE of –29.3 % and debt‑to‑equity of 3.36 warn that the company still carries substantial financial risk.

The bear case

The most compelling skeptic’s argument is the low Quality score of 25. A negative profit margin of –2.7 % and a negative ROE of –29.3 % indicate that DraftKings is still losing money as it grows. The “Diluting shareholders” signal warns that the company may issue more equity to fund expansion, which would erode per‑share value. If the debt‑to‑equity ratio climbs above 3.36 or the company’s free‑cash‑flow turns negative, the business model’s sustainability comes into question.

What would change our mind

FCF growth surpasses 20 % YoY for two consecutive quarters, proving the company can generate cash at a faster pace than revenue.
Profit margin improves to 0 % or higher, turning the negative operating profile into a positive one.
Debt‑to‑equity falls below 2.5, reducing financial leverage and improving capital efficiency.

If these thresholds are met, the Quality pillar would strengthen and the thesis would lean more confidently bullish.

DraftKings Inc. (DKNG): score, valuation & FAQ

DraftKings Inc. (DKNG) is a Gambling company that scores 29 out of 100 on the Bull Rankings quality-growth model — a weak reading. The score blends three pillars — quality (durable returns, healthy margins, low leverage), growth (revenue and earnings), and value (valuation versus sector peers) — into one number, refreshed daily; it is a screen, not a buy recommendation.

Its strongest graded signals are PEG (A) and Rev (B+). On valuation, DKNG sits about 4% below our discounted-cash-flow fair value (a margin of safety) — the current price implies free cash flow growing about 14% next year, slowing to 4% a year by year ten.

Is DKNG a good stock to buy?

Bull Rankings scores DKNG 29 out of 100 on its quality-growth model, which is a weak reading. That is driven by PEG (A) and Rev (B+). A score is a quantitative screen of DraftKings Inc.'s fundamentals, not personalised financial advice — weigh it against your own time horizon and risk tolerance, and read the risk factors below before acting.

Why does DKNG score 29 on Bull Rankings?

The score leans on growth at 50.0 out of 100, with value the weakest pillar at 19.1 — the three combine geometrically, so a weak one cannot be papered over by a strong one. DKNG earns its highest marks on PEG (A) and Rev (B+). Each signal is graded against sector-aware thresholds rather than one absolute bar, so DKNG is measured against Gambling peers, not against the market as a whole.

Is DKNG overvalued or undervalued?

Based on $19.58, DKNG sits about 4% below our discounted-cash-flow fair value (a margin of safety) — the current price implies free cash flow growing about 14% next year, slowing to 4% a year by year ten. Discounted-cash-flow estimates are sensitive to growth and discount-rate assumptions, so treat this as a cross-check, not a price target.

What are the main risks of investing in DKNG?

DraftKings’ D/E of 3.36 is a ticking time bomb: at $12.3B market cap, every incremental dollar of debt raises the cost of capital and crimps flexibility in a cyclical industry. The bear case is simple: if growth decelerates below 15% or regulatory scrutiny tightens (e.g., federal sports betting limits), the stock snaps to the $20.46 52-week low—a 17% downside that wipes out the ‘buy’ thesis overnight.

New to these metrics? See the guides and the methodology.

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