Is DraftKings Stock Still Attractive After Recent Rally And Swinging Performance In 2025

• Wondering if DraftKings is still a smart bet at today’s price, or if most of the upside has already been cashed out? This breakdown is for you.
• The stock has bounced recently, up 4.5% over the last week and 12.7% over the past month, even though it is still down 2.1% year to date and 10.9% over the last year after a 193.1% gain across three years.
• That swingy performance has come as DraftKings doubles down on product innovation, expands its footprint into new regulated states, and continues to push its brand through high profile sports partnerships and marketing campaigns. At the same time, tightening regulations around online betting and shifting investor sentiment toward profitability have added a new layer of risk and scrutiny to the story.
• Our current valuation checklist gives DraftKings a 3 out of 6 score for being undervalued. This means some metrics hint at opportunity while others flash caution. In the next sections we will unpack what different valuation methods say about the stock and, by the end, explore an even better way to think about what DraftKings is really worth.

Find out why DraftKings's -10.9% return over the last year is lagging behind its peers.

Approach 1: DraftKings Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a company is worth by projecting the cash it can generate in the future, then discounting those cash flows back to today in dollar terms.

DraftKings currently generates about $513.6 million in free cash flow and analysts expect this to grow rapidly over the next decade. By 2029, free cash flow is projected to reach roughly $2.16 billion, with further growth taking it above $3.7 billion by 2035 based on Simply Wall St extrapolations. These projections use a 2 Stage Free Cash Flow to Equity model, which assumes a faster growth phase followed by a more mature, slower growth period.

When all these future cash flows are discounted back to today, the model estimates an intrinsic value of about $95.29 per share. Compared with the current share price, this implies DraftKings is trading at a 62.7% discount to its DCF fair value. This suggests meaningful upside if these cash flow forecasts play out.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests DraftKings is undervalued by 62.7%. Track this in your watchlist or portfolio, or discover 903 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for DraftKings.

Approach 2: DraftKings Price vs Sales

For fast growing, still scaling platforms like DraftKings, the price to sales ratio is often a better yardstick than earnings. Profits are being reinvested heavily into growth and marketing, while revenue captures the underlying demand for the product.

In general, higher growth and stronger competitive advantages can justify a higher, or more expensive, sales multiple. Weaker growth, thinner margins or higher risk usually call for a lower, or cheaper, ratio. Today, DraftKings trades on a 3.24x price to sales multiple, which is above the Hospitality industry average of about 1.71x and also above its peer group average of roughly 2.13x.

Simply Wall St’s Fair Ratio provides a more tailored view by estimating what DraftKings price to sales multiple might be once its growth outlook, risk profile, profit margins, industry positioning and market cap are factored in. For DraftKings, that Fair Ratio is 3.32x, slightly higher than where the stock trades now. This indicates the market may not be overpaying for the company’s growth potential and could be pricing it somewhat conservatively.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1446 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your DraftKings Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple idea where you connect your view of DraftKings future with specific assumptions for revenue, earnings, margins and, ultimately, fair value. A Narrative is the story behind your numbers, linking what you believe about DraftKings product innovation, regulation and competition to a financial forecast, and then translating that forecast into a fair value you can compare to today’s share price to decide whether to buy, hold or sell. On Simply Wall St, Narratives sit inside the Community page, where millions of investors can easily build, share and refine these story driven valuations, and where each Narrative is automatically updated as new earnings, news or guidance changes the outlook. For DraftKings, one investor might build a bullish Narrative that leans toward the high analyst target of about $78, assuming strong expansion and margin gains, while another might anchor on the low target near $39.5, emphasizing regulatory and competitive risks, and each Narrative will continuously adapt as new information comes in.

Do you think there's more to the story for DraftKings? Head over to our Community to see what others are saying!

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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