DraftKings Inc. (DKNG) Stock Valuation — DCF Analysis
Gambling, Resorts & Casinos · NASDAQ
Current Price
$28.76
Intrinsic Value
$53.41
+46.2% margin of safety
COMPETITIVE MOAT
↑Brand Recognition & User Base
DraftKings has established strong brand recognition and a large, engaged user base. This loyalty and familiarity create a barrier to entry for new competitors in the online gambling space.
↑Data & Analytics Advantage
The company leverages extensive player data to optimize marketing, personalize offers, and improve product development. This data-driven approach enhances customer retention and acquisition efficiency.
↑Product Diversification & Innovation
Expansion into prediction markets via acquisitions like Railbird signals a strategy to broaden its offerings. This diversification can attract new customer segments and create stickier user engagement.
INVESTMENT RISKS
↓Regulatory & Market Access Hurdles
Exiting markets like Texas Lottery highlights the ongoing risk of regulatory changes and the difficulty in securing and maintaining market access. This can impact revenue and growth potential.
↓Intense Competition & Marketing Costs
The online gambling industry is highly competitive, requiring significant investment in customer acquisition and retention. High marketing costs can pressure profitability and limit margin expansion.
↓Dependence on Key Markets
While expanding, DraftKings' success remains tied to the regulatory landscape and consumer adoption in its core operating regions. Shifts in these areas pose a significant risk.
Base case
DKNG base case valuation
A base case discounted cash flow model for DKNG estimates an intrinsic value of about $53.41 per share, against a current price of $28.76. The model assumes 20.0% annual free cash flow growth, a 10.0% discount rate, and a 21x exit multiple.
Intrinsic Value
$53.41
Margin of safety
+46.2%
Expected annual return
+13.2%
Base case assumptions: 20.0% annual growth, 10.0% discount rate, 21x exit multiple, 5 year projection. Data as of 2026-06-15.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the DKNG valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for DraftKings Inc. respond.
Open DCF Calculator for DKNGCompany Overview
DraftKings Inc. operates as a leading digital enterprise specializing in sports entertainment and gaming. The company provides sophisticated multi-channel sports betting and gaming technology solutions to operators across 17 countries, facilitating diverse entertainment experiences. Directly, DraftKings manages its own iGaming services under the DraftKings brand in five U.S. states, and separately operates Golden Nugget Online Gaming, another iGaming offering, in three states. Its Sportsbook platform is accessible for both mobile and physical wagers in 18 U.S. states, all in compliance with local regulations. Beyond traditional betting, DraftKings offers its daily fantasy sports product globally in six countries, spanning 15 different sports disciplines. Further diversifying its portfolio, the company has established DraftKings Marketplace, a user-friendly digital collectibles platform featuring curated NFT releases and supporting secondary trading. It also possesses Vegas Sports Information Network (VSiN), a multi-platform content and broadcasting entity. Established in 2011, DraftKings Inc. maintains its headquarters in Boston, Massachusetts.
Financial Metrics — DKNG Stock Valuation Data
Revenue/Share (TTM)
$12.91
FCF/Share (TTM)
$1.39
ROIC (TTM)
1.0%
ROE (TTM)
7.9%
P/FCF
21.0x
EV/EBITDA
37.8x
FCF Yield
4.76%
Debt/Equity
3.17x
Based on trailing twelve-month data, DKNG shows a free cash flow per share of $1.39 and a ROIC of 1.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 21.0x and FCF yield of 4.76% are important context metrics when evaluating DKNG's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of DKNG?
DraftKings Inc. currently generates $1.39 in free cash flow per share. At the current price of $28.76, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is DKNG undervalued?
DKNG trades at a P/FCF ratio of 21.0x with a free cash flow yield of 4.76%. This P/FCF is in a moderate range. However, whether DKNG is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value DKNG stock using DCF?
To perform a DCF valuation on DraftKings Inc.: (1) Start with the trailing free cash flow per share ($1.39) as the base, (2) project future FCF growth over 5-10 years based on Gambling, Resorts & Casinos industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting DKNG's risk profile — with a debt-to-equity of 3.17x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to DKNG?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For DraftKings Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Gambling, Resorts & Casinos trends, then discounting those amounts to today's dollars. DKNG's ROIC of 1.0% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect DKNG stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For DKNG, with a debt-to-equity ratio of 3.17x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 37.8x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See DKNG PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Cyclical valuationsDCF and P/E value DKNG with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-15. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.