DKNG
DraftKings Inc.
$20.68
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 30.3% below fair value
You pay
$20.68
Bear
$16.52
Fair
$29.66
Bull
$45.83
Bear
$16.52
-20.1%
12% stage 1 growth, 12% discount
Fair
$29.66
+43.4%
19% stage 1 growth, 12% discount
Bull
$45.83
+121.6%
25% stage 1 growth, 12% discount
Adjust Assumptions
19.4%
12.0%
3.0%
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
42%
Implied Market Multiple
26.3x
Market is pricing in (growth)
14.6%
vs 19.4% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (48 analysts)
$32.89
Divergence from AlphaVal
10%
Summary
Using a two-stage FCF DCF with 19% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $29.66 per share.
Warnings
Stock-based employee pay equals 9146% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions