DraftKings: A Strong Buy On Sticky Monetization Trends

Summary:

  • DraftKings has grown from a fledgling gambling outfit into a betting juggernaut over the last few years, gaining share and reaching an inflection point in profitability.
  • With an undemanding 5x sales multiple, there’s room for expansion and appreciation through multiple routes.
  • We see a 25%+ annualized upside through 2026 as a strong possibility, as marketing spend continues to slow and the company keeps rapidly growing users & RPU.
  • We rate the stock a “Strong Buy”.

DraftKings Headquarters Opening

Darren McCollester/Getty Images Entertainment

A few years ago, DraftKings Inc. (NASDAQ:DKNG) was, in our view, and to put it mildly, an expensive-looking train wreck.

After going public via SPAC in 2020, DKNG quickly became one of the cohorts of stocks that


Analyst’s Disclosure: I/we have a beneficial long position in the shares of DKNG either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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