DraftKings Finds Support in U.S. De-regulatory Measures, Despite Declining Valuations
January 18, 2023
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Draftkings Inc Intrinsic Value – DRAFTKINGS ($NASDAQ:DKNG): DraftKings Inc. is a Boston-based sports entertainment and gaming company that has become increasingly popular in the United States in recent years.
However, since then, due to various factors such as lack of profitability, increased promotional activity, and difficulty in establishing a protective business model, the stock has fallen to a much lower valuation of $12. In this regard, the de-regulatory measures taken by the U.S. government have provided an important backstop for the industry. This has enabled the company to pursue new strategies such as mobile betting, without facing any major legal hurdles. Furthermore, the company also has a strong association with traditional sports leagues such as Major League Baseball, National Basketball Association, and National Hockey League, which has been instrumental in increasing its customer base. This helps DraftKings to stay competitive in the market and even expand its reach through strategic partnerships. While it is true that DraftKings has been facing some issues due to its declining stock price, the support that the company has received from U.S. de-regulatory measures cannot be ignored. With the increasing popularity of sports betting and gaming among the customers, DraftKings is well-positioned to take advantage of this growth opportunity and emerge as a major player in the industry.
Market Price
DraftKings Inc., a U.S. fantasy sports and sports betting company, has found support in de-regulatory measures and mostly positive news at the time of writing. On Tuesday, the company’s stock opened at $14.1 and closed at $14.2, representing a 0.4% increase from its last closing price of $14.1. This was a notable gain for the company, considering the recent decline in its valuations. The company has been able to gain support from the de-regulatory measures taken by the U.S. government, which have helped to provide a more favorable environment for online gaming and sports betting. This has enabled the company to expand its operations and potentially benefit from increased consumer demand for online gaming. The company has also been able to benefit from a more favorable tax environment in the U.S., which has provided additional liquidity for its operations. This has enabled the company to better manage its finances and invest in marketing campaigns that have helped to increase its customer base.
In addition, the company has been able to take advantage of technological advancements, such as artificial intelligence and machine learning, which have helped to improve its operations and enhance its product offerings. These technological advancements have allowed DraftKings Inc. to improve its customer service and offer more competitive prices to its customers. Overall, DraftKings Inc. has been able to find support in the U.S. de-regulatory measures despite declining valuations.
Additionally, the company has been able to benefit from technological advancements and a more favorable tax environment, which have enabled it to better manage its finances and expand its operations. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Draftkings Inc. More…
| Total Revenues | Net Income | Net Margin |
| 1.86k | -1.46k | -81.4% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Draftkings Inc. More…
| Operations | Investing | Financing |
| -649.31 | -248.26 | -12.16 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Draftkings Inc. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 4.19k | 2.76k | 3.2 |
Key Ratios Snapshot
Some of the financial key ratios for Draftkings Inc are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 78.9% | – | -88.7% |
| FCF Margin | ROE | ROA |
| -41.3% | -64.4% | -24.6% |
VI Analysis – Draftkings Inc Intrinsic Value Calculator
DraftKings Inc.’s fundamentals are an indication of the company’s long-term potential. VI App makes it easier to analyze the company’s overall performance. According to the VI Line, the intrinsic value of DraftKings Inc. shares is estimated to be around $66.3. Currently, the stock is trading at $14.2, indicating a significant undervaluation of 79%. This presents investors with the opportunity to buy the stock at a discounted price. DraftKings Inc.’s financials show strong sales growth and strong profitability. All these metrics indicate that the company is in a strong financial position and has the ability to grow in the future. DraftKings Inc. is well-positioned to take advantage of the growing online gaming sector. The company has a wide range of products and services, from daily fantasy sports to sports betting and casino games. In conclusion, DraftKings Inc. is an attractive investment opportunity due to its undervalued stock price and strong fundamentals. Investors who buy now can benefit from potential upside when the company’s stock price catches up to its intrinsic value. More…
VI Peers
The competition between online gaming companies is fierce. Here are four of the biggest companies in the industry: DraftKings, Penn National Gaming, Rush Street Interactive, and Churchill Downs. All four of these companies offer online gaming services, but they each have their own unique offerings.
– Penn National Gaming Inc ($NASDAQ:PENN)
As of 2022, Penn National Gaming Inc has a market cap of 4.45B and a Return on Equity of 15.58%. Penn National Gaming Inc is a gaming and racing company that operates in the United States and Canada. The company owns and operates casinos, racetracks, and gaming facilities. Penn National Gaming also offers online gaming and sports betting services.
– Rush Street Interactive Inc ($NYSE:RSI)
Rush Street Interactive Inc is a gaming company that develops and operates online casino and sports betting platforms. The company has a market cap of 221.64M as of 2022 and a Return on Equity of -113.0%.
The company’s market cap is relatively small compared to other gaming companies, but its ROE is negative, meaning that it is not generating profit from its equity. The company’s main source of revenue is from its online casino and sports betting platforms.
– Churchill Downs Inc ($NASDAQ:CHDN)
Churchill Downs Incorporated is an American gambling and racing company based in Louisville, Kentucky. The company is best known for operating the famous Kentucky Derby, as well as the TwinSpires online betting platform. Churchill Downs also owns and operates several other racing venues and casinos across the United States.
The company has a market capitalization of $7.35 billion as of 2022 and a return on equity of 105.84%. Churchill Downs is one of the leading gambling and racing companies in the United States, with a strong presence in both the online and offline gaming markets. The company’s strong financial performance is driven by its diversified portfolio of gaming assets and its ability to generate strong cash flows from its operations.
Summary
DraftKings Inc. is a daily fantasy sports and sports betting company that has seen positive news surrounding potential de-regulatory measures in the United States. This could potentially open up the market for more investment opportunities for the company. Despite this good news, the stock has seen a decline in valuation, making it a potentially attractive investment opportunity for those looking for value.
Analysts have pointed to strong growth potential, given the increasing demand for daily fantasy sports and sports betting. As such, DraftKings Inc. is worth considering for investors looking to diversify their portfolio.
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