DKNG
DraftKings Inc.
$25.12
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Fair Value
Trading 17.8% below fair value
You pay
$25.12
Bear
$17.17
Fair
$30.56
Bull
$46.92
Bear
$17.17
-31.7%
11% stage 1 growth, 12% discount
Fair
$30.56
+21.6%
19% stage 1 growth, 12% discount
Bull
$46.92
+86.8%
25% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
41%
Implied Market Multiple
32.5x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $35.78 from 48 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $30.56 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