DraftKings: A Better Buy After The Correction – Mixed Near-Term Prospects

Summary:

  • DraftKings’ FY2024 guidance has been lowered, impacting its stock performance and investor’s confidence, despite maintaining a leading market share and robust growth in the US gaming market.
  • Recent acquisitions, including Jackpocket, Inc., are not immediately bottom-line accretive, contributing to a deteriorating balance sheet and mixed sentiments about DKNG’s near-term prospects.
  • The management’s inaugural $1B share repurchase authorization reflects their confidence in the long-term outlook, despite the negative cash flows from operating activities over the last twelve months.
  • Despite the mixed FQ2’24 performance, DKNG’s high-growth investment thesis remains intact, with a significant long-term upside potential.

Stock Chart Bounces Off Man"s Outstretched Hand

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DKNG’s High-Growth Investment Thesis, Marred By The Management’s Painfully Lowered FY2024 Guidance

We previously covered DraftKings (NASDAQ:DKNG) in May 2024, discussing how the management had exceeded expectations by reporting an impressive FY2023 and FQ1’24 earnings results, while charting


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