DKNG
DraftKings Inc.
$24.32
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Fair Value
Trading 23.9% below fair value
You pay
$24.32
Bear
$17.46
Fair
$31.96
Bull
$50.05
Bear
$17.46
-28.2%
12% stage 1 growth, 12% discount
Fair
$31.96
+31.4%
20% stage 1 growth, 12% discount
Bull
$50.05
+105.8%
26% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (20% base case)
Terminal Value % of EV
42%
Implied Market Multiple
31.5x
Market is pricing in (growth)
17.0%
vs 20.0% base
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 $35.61 from 48 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $31.96 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