MeritValue

DraftKings Inc.

DKNGdata completeness 88%6 fiscal years on file

Data notes: no data for concept 'totalDebt'

The thesis, from the filings

DraftKings Inc. earns about -68% on equity, below its ~9% cost of capital, but has diluted owners by 23% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $16.86 and $18.1 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$1.3B1$2.24B2$3.67B3$4.77B3$6.05B3
Net income−$1.52B4−$1.38B5−$802.1M6−$507.3M6$3.71M6
Operating cash flow−$419.5M7−$625.5M8−$1.75M9$417.8M9$662.9M9
Capital expenditure$15.9M10$32.4M11$20.9M12$10.2M12$15.4M12
Free cash flow (derived)−$435.4M7−$657.9M8−$22.7M9$407.6M9$647.5M9
Total debt—————
Cash & equivalents$2.15B13$1.31B14$1.27B15$788.3M15$1.13B15
Diluted shares402.5M436.5M462.6M482.0M495.9M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$12.73
your share of equity
Profit it earned you last year
$0.07
Free cash flow it threw off
$13.06
Debt you’d be carrying
—

10 shares is a claim on $12.73 of net worth that earned you $0.07 and generated $13.06 of cash last year.

iii. Is this a good business?
Moat signal · return on equity
-68% avg · 5y
FY21 -91%FY22 -104%FY23 -95%FY24 -50%FY25 1%

It earned about -68% on equity against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+23% shares · 5y

Share count is up 23% over 5 years — owners have been diluted. Worth asking what they got for it.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 2 estimate methods that apply put fair value between $16.86 and $18.1 a share. They rest on different assumptions, so where they diverge is the story.

DCF · Growth Exit 10Y
$18.1
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth5.0%
  • fcfBase$407.6M
DCF · Growth Exit 5Y
$16.86
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth5.0%
  • fcfBase$407.6M
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
not applicable
diluted EPS missing or non-positive — Graham Number undefined

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years5.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $16.86
The three cases
Bear0.0%$14.02
Base5.0%$16.86
Bull10.0%$20.26

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 5.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001883685-24-000010 (RevenueFromContractWithCustomerIncludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001883685-25-000010 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001883685-26-000013 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001883685-24-000010 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001883685-25-000010 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001883685-26-000013 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001883685-24-000010 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001883685-25-000010 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001883685-26-000013 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001883685-24-000010 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001883685-25-000010 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001883685-26-000013 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001883685-24-000010 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0001883685-25-000010 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0001883685-26-000013 (CashAndCashEquivalentsAtCarryingValue)