DraftKings Inc.
DraftKings Inc. Fundamental Analysis
DraftKings Inc. (DKNG) shows weak financial fundamentals with a PE ratio of 2853.15, profit margin of 0.06%, and ROE of 0.46%. The company generates $6.2B in annual revenue with strong year-over-year growth of 30.07%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 27.6/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze DKNG's fundamental strength across five key dimensions:
Efficiency Score
WeakDKNG struggles to generate sufficient returns from assets.
Valuation Score
WeakDKNG trades at a premium to fair value.
Growth Score
ExcellentDKNG delivers strong and consistent growth momentum.
Financial Health Score
ModerateDKNG shows balanced financial health with some risks.
Profitability Score
ModerateDKNG maintains healthy but balanced margins.
Key Financial Metrics
Is DKNG Expensive or Cheap?
P/E Ratio
DKNG trades at 2853.15 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, DKNG's PEG of 27.95 indicates potential overvaluation.
Price to Book
The market values DraftKings Inc. at 16.76 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 29.48 times EBITDA. This signals the market has high growth expectations.
How Well Does DKNG Make Money?
Net Profit Margin
For every $100 in sales, DraftKings Inc. keeps $0.06 as profit after all expenses.
Operating Margin
Core operations generate -0.16 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $0.46 in profit for every $100 of shareholder equity.
ROA
DraftKings Inc. generates $0.08 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
DraftKings Inc. produces operating cash flow of $677.19M, showing steady but balanced cash generation.
Free Cash Flow
DraftKings Inc. generates strong free cash flow of $625.62M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.26 in free cash annually.
FCF Yield
DKNG converts 5.68% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
2853.15
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
27.95
vs 25 benchmark
P/B Ratio
Price to book value ratio
16.76
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.79
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
3.06
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.03
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.005
vs 25 benchmark
ROA
Return on assets percentage
0.001
vs 25 benchmark
ROCE
Return on capital employed
-0.00
vs 25 benchmark
How DKNG Stacks Against Its Sector Peers
| Metric | DKNG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 2853.15 | 24.85 | Worse (Expensive) |
| ROE | 0.46% | 1165.00% | Weak |
| Net Margin | 0.06% | 749.00% | Weak |
| Debt/Equity | 3.06 | 0.76 | Weak (High Leverage) |
| Current Ratio | 1.03 | 9.23 | Neutral |
| ROA | 0.08% | 1271.00% | Weak |
DKNG outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews DraftKings Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
464.66%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
-36.59%
Industry Style: Cyclical, Growth, Discretionary
DecliningFCF CAGR
302.86%
Industry Style: Cyclical, Growth, Discretionary
High Growth