Reviewing DraftKings (DKNG) & Its Peers

DraftKings (NASDAQ: DKNG) is one of 24 public companies in the “Miscellaneous amusement & recreation services” industry, but how does it weigh in compared to its rivals? We will compare DraftKings to related businesses based on the strength of its dividends, earnings, institutional ownership, valuation, profitability, analyst recommendations and risk.

Insider and Institutional Ownership

55.4% of DraftKings shares are owned by institutional investors. Comparatively, 45.5% of shares of all “Miscellaneous amusement & recreation services” companies are owned by institutional investors. 62.0% of DraftKings shares are owned by insiders. Comparatively, 22.2% of shares of all “Miscellaneous amusement & recreation services” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares DraftKings and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DraftKings -133.84% -49.11% -34.51%
DraftKings Competitors -260.74% -1,130.46% -47.54%

Earnings and Valuation

This table compares DraftKings and its rivals revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
DraftKings $614.53 million -$1.23 billion -19.44
DraftKings Competitors $3.79 billion -$344.29 million -80.69

DraftKings’ rivals have higher revenue and earnings than DraftKings. DraftKings is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a summary of recent recommendations for DraftKings and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DraftKings 0 6 21 0 2.78
DraftKings Competitors 145 830 1573 42 2.58

DraftKings currently has a consensus price target of $68.46, indicating a potential upside of 27.61%. As a group, “Miscellaneous amusement & recreation services” companies have a potential upside of 6.55%. Given DraftKings’ stronger consensus rating and higher probable upside, equities research analysts clearly believe DraftKings is more favorable than its rivals.

Risk and Volatility

DraftKings has a beta of 1.95, indicating that its stock price is 95% more volatile than the S&P 500. Comparatively, DraftKings’ rivals have a beta of 1.77, indicating that their average stock price is 77% more volatile than the S&P 500.

Summary

DraftKings beats its rivals on 10 of the 13 factors compared.

About DraftKings

DraftKings Inc. operates as a digital sports entertainment and gaming company in the United States. It operates through two segments, Business-to-Consumer and Business-to-Business. The company provides users with daily sports, sports betting, and iGaming opportunities. It is also involved in the design, development, and licensing of sports betting and casino gaming platform software for online and retail sportsbook, and casino gaming products. The company distributes its product offerings through various channels, including traditional websites, direct app downloads, and direct-to-consumer digital platforms. DraftKings Inc. is headquartered in Boston, Massachusetts.

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