DraftKings: The Prediction Market Boogeyman
Summarize this article with:
YR Research5.13K FollowersFollow5ShareSavePlay(7min)CommentsSummaryDraftKings is downgraded to "Hold" due to intensifying competition and operational setbacks.Prediction markets are rapidly gaining traction, pressuring DKNG's margins and forcing costly new investments.Q3 results were underwhelming: revenue and earnings missed estimates, user growth stagnated, and margins deteriorated.DKNG trades at 35x EBITDA—over 2x the faster-growing Flutter—after cutting 2025 EBITDA guidance by nearly 50%. OleJohny/iStock via Getty Images DraftKings Inc. (DKNG) shares have been having a rough couple of months, with the stock down 34% since February. Just when the company started proving its business model and had reached the necessary scale to achieve consistent profitability, prediction markets cameThis article was written byYR Research5.13K FollowersFollowI aim to invest in companies with perfect qualitative attributes, buy them at an attractive price based on fundamentals, and hold them forever. I hope to publish articles covering such companies approximately 3 times per week, with extensive quarterly follow-ups and constant updates.I manage a concentrated portfolio targeted at avoiding losers and maximizing exposure to big winners. This means that often I'll rate great companies at a 'Hold' because their growth opportunity is below my threshold, or their downside risk is too high.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.