DraftKings is a digital sports entertainment and gaming company operating in the online betting and fantasy sports landscape. The company's business model revolves around allowing users to place daily and weekly bets on sports events and player performances across major leagues including NFL, NBA, MLB, NHL, and PGA [5]. DraftKings generates revenue primarily through contest entry fees, sports betting commissions, advertising partnerships, premium subscription services, and data licensing [1]. As of recent reports, the company has expanded its offerings to include digital lottery courier services through its Jackpocket acquisition and is pursuing growth in live betting capabilities [2].

• In Q4 2024, DraftKings generated revenue of $1.39 billion, representing 13.15% year-over-year growth, and delivered $89 million in adjusted EBITDA [2][4].
• Customer acquisition exceeded expectations, with newly acquired sportsbook and iGaming customers continuing to increase year-over-year, boosted by the Mega Millions jackpot reaching $1.2 billion in late December [2].
• Structural sportsbook hold percentage improved 80 basis points year-over-year to 11.2% for the quarter, with NFL parlay handle mix improving more than 600 basis points [2].
• For the full year 2024, revenue increased 30% year-over-year to $4.8 billion, while adjusted EBITDA improved $332 million year-over-year to $181 million [2].

• DraftKings has demonstrated impressive revenue growth, with a 5-year compound annual growth rate (CAGR) of 60.39% from 2020 to 2024 [2][3].
• Annual revenue has grown from $614.53 million in 2020 to $4.77 billion in 2024, representing a consistent upward trajectory with year-over-year growth of 30.07% in the most recent fiscal year [3][4].
• The company has shown strong momentum in 2025, with January performance exceeding expectations and February showing continued strength in acquisition, retention, and engagement [2].
• For fiscal year 2025, DraftKings has raised its revenue guidance to a range of $6.3 billion to $6.6 billion, representing year-over-year growth of 32% to 38% [2].
• Growth is being driven by increasing structural sportsbook hold percentage (reaching 11.2% in Q4 2024), improved promotional efficiency, and expansion into new markets and verticals like digital lottery courier services [2].

• DraftKings has a debt-to-equity ratio of 124.3%, with total debt of $1.26 billion against shareholder equity of $1.01 billion, indicating a relatively high level of leverage [1][4].
• The company's short-term assets ($1.5B) do not fully cover its short-term liabilities ($1.7B), suggesting some liquidity pressure [1].
• However, DraftKings achieved positive free cash flow for the first time in its history in 2024, and projects approximately $850 million in free cash flow for fiscal year 2025 [2].
• The company has $788.29 million in cash and cash equivalents, giving it a net debt position of $546.80 million or -$1.12 per share [4].
• While still unprofitable on a GAAP basis (net loss of $507.29 million in 2024), DraftKings has sufficient cash runway for more than 3 years due to positive and growing free cash flow [1][4].

CEO Jason Robins, who co-founded the company in 2012, continues to lead DraftKings with a focus on expanding into new markets and improving operational efficiencies [5]. The management team recently underwent changes with Alan Ellingson being elevated to Chief Financial Officer and former CFO Jason Park becoming Chief Transformation Officer to focus on deploying cutting-edge technologies and capturing additional operating efficiencies [1]. These leadership changes demonstrate the company's commitment to technological advancement and financial discipline as it moves toward sustained profitability.

DraftKings currently trades at a price-to-sales ratio of 4.10x and a price-to-book ratio of 19.61x, reflecting the market's high growth expectations [4]. According to DCF valuation models, the stock appears undervalued by approximately 26%, with an estimated intrinsic value of $54.99 compared to its current market price of around $40.52 [1]. Analyst consensus is bullish, with an average price target of $55.19, suggesting 36.20% upside potential [4]. While the company is not yet profitable on a GAAP basis, its improving adjusted EBITDA and free cash flow metrics support the premium valuation multiples.

DraftKings faces significant competitive pressure from established rivals like FanDuel and BetMGM, as well as new entrants such as Fanatics and ESPN, which could threaten market share and increase customer acquisition costs [1][2]. Regulatory risks remain a concern as the company navigates varying state-by-state gambling regulations and potential tax changes [2]. Additionally, the company's high debt level and continued GAAP losses represent financial risks that could impact long-term sustainability if growth slows or market conditions deteriorate [1][4].

DraftKings presents a compelling investment opportunity with strong revenue growth, improving operational metrics, and a clear path to profitability through increasing hold percentages and operational efficiencies. Despite facing competitive and regulatory challenges, the company's expanding product offerings and growing market presence position it well for continued success. With the stock appearing undervalued based on DCF models and analyst price targets, DraftKings warrants a BUY recommendation for investors with moderate risk tolerance and a long-term investment horizon.