DraftKings Inc. (DKNG): A Bull Case Theory

We came across a bullish thesis on DraftKings Inc. (DKNG) on Substack by LongTermValue Research. In this article, we will summarize the bulls’ thesis on DKNG. DraftKings Inc. (DKNG)’s share was trading at $33.19 as of April 1st. DKNG’s forward P/E was 21.05 according to Yahoo Finance.

DraftKings (DKNG) is a dominant player in the online sports betting market. With a best-in-class user interface and a strong brand presence, DraftKings has built a competitive advantage over traditional casino-operated sportsbooks. The company is currently legal in 25 U.S. states and continues expanding its footprint as new markets open. Despite its premium valuation—trading at 28.4x and 19.5x estimated earnings for 2025 and 2026—its projected 46% EPS growth in 2026 makes it an attractive long-term play. The stock is down 28% from its 30-day high and 48% from its all-time high, offering a compelling entry point. While regulatory risks and stock-based compensation dilution remain concerns. At 20x projected 2027 FCF minus SBC, the stock presents a potential 50% upside. The company’s strong market positioning, continued state-by-state legalization, and focus on profitability make it a high-quality investment opportunity, especially at current levels.

DraftKings Inc. (DKNG) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 65 hedge fund portfolios held DKNG at the end of the fourth quarter which was 54 in the previous quarter. While we acknowledge the risk and potential of DKNG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DKNG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.