DraftKings: The Odds Are Against You At The Current Valuation


  • DraftKings benefits from strong growth prospects due to secular tailwinds.
  • It faces intense competition with no clear customer retention advantages.
  • The current valuation may be unrealistic and may reflect an overly optimistic scenario.
Rolling the dice

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DraftKings (NASDAQ:DKNG) is riding several attractive growth waves, including the legalization of online sports betting, digitalization, the rise in sports popularity, and the regulators’ never-ending appetite for more tax income.

On the flip side, it competes in a highly competitive market, with

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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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