DraftKings (DKNG): Valuation Check After New York Growth and Missouri Expansion Approval

DraftKings (DKNG) just posted a solid jump in New York, with its betting handle up about 16% and revenue up 13% year over year, while also securing a mobile betting license in Missouri.

See our latest analysis for DraftKings.

That New York momentum and the new Missouri license come as the share price sits at about $34.54, with a strong 1 month share price return of 16.77 percent but a softer 1 year total shareholder return of negative 15.18 percent. This suggests near term enthusiasm following a tougher stretch.

If DraftKings has you rethinking growth potential in this space, it might be worth exploring other high growth tech and AI names through high growth tech and AI stocks as potential complements or alternatives in a diversified portfolio.

With shares still trading below analyst targets despite robust revenue and income growth, investors now face a key question: Is DraftKings a discounted entry into long term digital betting growth, or is the market already pricing it in?

Most Popular Narrative Narrative: 22.9% Undervalued

With DraftKings closing at $34.54 against a most popular narrative fair value near $44.81, the valuation case leans firmly toward upside potential.

Analysts are assuming DraftKings's revenue will grow by 20.5% annually over the next 3 years.

Analysts assume that profit margins will increase from -5.6% today to 13.8% in 3 years time.

Read the complete narrative.

Want to see how aggressive growth, rising margins and a richer future earnings multiple combine into that fair value gap? The narrative spells out the full playbook.

Result: Fair Value of $44.81 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent regulatory uncertainty and intensifying competition from new prediction market platforms could quickly erode DraftKings' margin expansion and the growth assumptions underpinning that valuation.

Find out about the key risks to this DraftKings narrative.

Build Your Own DraftKings Narrative

If you see the outlook differently or simply want to dig into the numbers yourself, you can build a custom view in just minutes: Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding DraftKings.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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