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2021-06-22
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DraftKings' Stumble Offers An Opportunity
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{"i18n":{"language":"en_US"},"userPageInfo":{"id":"4087445069188990","uuid":"4087445069188990","gmtCreate":1624342188008,"gmtModify":1624342188008,"name":"CT88","pinyin":"ct88","introduction":"","introductionEn":"","signature":"","avatar":"https://static.laohu8.com/default-avatar.jpg","hat":null,"hatId":null,"hatName":null,"vip":1,"status":2,"fanSize":1,"headSize":5,"tweetSize":1,"questionSize":0,"limitLevel":999,"accountStatus":4,"level":{"id":0,"name":"","nameTw":"","represent":"","factor":"","iconColor":"","bgColor":""},"themeCounts":0,"badgeCounts":0,"badges":[],"moderator":false,"superModerator":false,"manageSymbols":null,"badgeLevel":null,"boolIsFan":false,"boolIsHead":false,"favoriteSize":0,"symbols":null,"coverImage":null,"realNameVerified":"success","userBadges":[{"badgeId":"1026c425416b44e0aac28c11a0848493-2","templateUuid":"1026c425416b44e0aac28c11a0848493","name":"Senior Tiger","description":"Join the tiger community for 1000 days","bigImgUrl":"https://static.tigerbbs.com/0063fb68ea29c9ae6858c58630e182d5","smallImgUrl":"https://static.tigerbbs.com/96c699a93be4214d4b49aea6a5a5d1a4","grayImgUrl":"https://static.tigerbbs.com/35b0e542a9ff77046ed69ef602bc105d","redirectLinkEnabled":0,"redirectLink":null,"hasAllocated":1,"isWearing":0,"stamp":null,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2024.04.09","exceedPercentage":null,"individualDisplayEnabled":0,"backgroundColor":null,"fontColor":null,"individualDisplaySort":0,"categoryType":1001},{"badgeId":"a83d7582f45846ffbccbce770ce65d84-1","templateUuid":"a83d7582f45846ffbccbce770ce65d84","name":"Real Trader","description":"Completed a transaction","bigImgUrl":"https://static.tigerbbs.com/2e08a1cc2087a1de93402c2c290fa65b","smallImgUrl":"https://static.tigerbbs.com/4504a6397ce1137932d56e5f4ce27166","grayImgUrl":"https://static.tigerbbs.com/4b22c79415b4cd6e3d8ebc4a0fa32604","redirectLinkEnabled":0,"redirectLink":null,"hasAllocated":1,"isWearing":0,"stamp":null,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2021.12.29","exceedPercentage":null,"individualDisplayEnabled":0,"backgroundColor":null,"fontColor":null,"individualDisplaySort":0,"categoryType":1100}],"userBadgeCount":2,"currentWearingBadge":null,"individualDisplayBadges":null,"crmLevel":2,"crmLevelSwitch":0,"location":null,"starInvestorFollowerNum":0,"starInvestorFlag":false,"starInvestorOrderShareNum":0,"subscribeStarInvestorNum":0,"ror":null,"winRationPercentage":null,"showRor":false,"investmentPhilosophy":null,"starInvestorSubscribeFlag":false},"baikeInfo":{},"tab":"post","tweets":[{"id":129024784,"gmtCreate":1624346299148,"gmtModify":1703834059972,"author":{"id":"4087445069188990","authorId":"4087445069188990","name":"CT88","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4087445069188990","authorIdStr":"4087445069188990"},"themes":[],"htmlText":"Good","listText":"Good","text":"Good","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/129024784","repostId":"1139414035","repostType":4,"repost":{"id":"1139414035","kind":"news","pubTimestamp":1624345572,"share":"https://ttm.financial/m/news/1139414035?lang=&edition=fundamental","pubTime":"2021-06-22 15:06","market":"us","language":"en","title":"DraftKings' Stumble Offers An Opportunity","url":"https://stock-news.laohu8.com/highlight/detail?id=1139414035","media":"seekingalpha","summary":"Summary\n\nDraftKings has pulled back after a broader pullback on growth stocks and a short report tar","content":"<p><b>Summary</b></p>\n<ul>\n <li>DraftKings has pulled back after a broader pullback on growth stocks and a short report targeting the betting company.</li>\n <li>However, DraftKings continues to grow at a torrid pace and innovate along the way.</li>\n <li>DraftKings offers a more compelling risk/reward after a 20% drop since my last look at them.</li>\n</ul>\n<p>Fantasy sports and betting platform DraftKings Inc. (DKNG) has steadily slid lower since mid-March. The most recent piece of bad news, a short report, claimed that the company is concealing illegal activities. Shares have come down 35% from highs.</p>\n<p>However, at an operational level, DraftKings continues to grow and innovate. The company posted strong Q1 results and is investing heavily to lay the groundwork to be the primary player in sports betting, an industry that is continuing to blossom. While DraftKings continues to carry some risks that investors should be aware of, the pullback has offered a more compelling risk/reward entry for investors.</p>\n<p><b>DraftKings Continues To Grow & Innovate</b></p>\n<p>DraftKings reported its Q1 earnings for 2021 in May, and results showed a glimpse into the company's continued upward trajectory. The business is growing at a rapid rate and continues to innovate.</p>\n<p>For the quarter, DraftKings reported revenues of $312 million, year over year growth of 175% on a Pro-forma basis. This growth was driven in part by new state launches in Michigan and Virginia. The betting and iGaming landscape is still developing, so new state launches will continue to play an important role in growth for the foreseeable future.</p>\n<p>Additionally, DraftKings is innovating to drive engagement (and thus revenue growth) on the platform. It recently launched \"Spanish 21\", a variant game of Blackjack, and it is currently unique among iGaming operators to DraftKings.</p>\n<p><img src=\"https://static.tigerbbs.com/38bef09e9a4a3b68cab2d9bc336ac15b\" tg-width=\"640\" tg-height=\"192\"></p>\n<p>Source: DraftKings Inc.</p>\n<p>The more impactful innovation that DraftKings is working on is the features that it is adding to turn DraftKings into a one-stop-shop platform for a gaming experience. There are two great examples of this in the works. DraftKings is collaborating with SLING TV to launch sports betting information channels. This ties real-time sports updates into betting odds, producing a more engaging experience for customers.</p>\n<p><img src=\"https://static.tigerbbs.com/ca4d93bb27aaf7fd36bdfc6e3734a43a\" tg-width=\"640\" tg-height=\"199\"></p>\n<p>Source: DraftKings Inc.</p>\n<p>DraftKings is also launching social media features on its platform that will allow customers to interact with each other by friending, commenting, and sharing bets with others.</p>\n<p><img src=\"https://static.tigerbbs.com/5a5c6faace4c411e5a7e2976c2ae702f\" tg-width=\"640\" tg-height=\"384\"></p>\n<p>Source: DraftKings Inc.</p>\n<p>This is a great opportunity for DraftKings, as there are high-profile gamblers on traditional social media platforms already that prove this concept out. I wouldn't be surprised to see DraftKings spending to bring high-profile bettors onto DraftKings' platform as an effort to attract followers that can \"play along\" with these betting celebrities.</p>\n<p><b>About The Short Report</b></p>\n<p>Shares of DraftKings took a recent tumble when a short report emerged, accusing the company of concealing illegal activity from the public.</p>\n<p><i>Investors should consider every bear case, soyou can find it herefor those interested in checking it out.</i></p>\n<p>The report is based on a lot of insinuation (typical of short reports), so I won't go into a ton of detail here. The basic point of the report is that a segment of DraftKings known as SBTech before the SPAC merger is involved in black market dealings, and it's being hidden from regulators and investors.</p>\n<p>I didn't find enough credible evidence of this upon reading the report, and I like to think that all of the partnerships that DraftKings has amassed are a sign of things being done properly. Nonetheless, investors can read and decide for themselves.</p>\n<p><b>The Risk That Investors Should Keep Eyes On</b></p>\n<p>If there is a legitimate reason for caution on DraftKings, I believe it to be the company's rapid cash-burning that continues to take place.</p>\n<p><i>I wrote about it in my previous article on DraftKings,which can be found here.</i></p>\n<p>DraftKings aggressively spends on sales and marketing to grow revenue, as we can see that this expense category alone almost eclipses revenues despite the company's top-line growth.</p>\n<p><img src=\"https://static.tigerbbs.com/f23d5da6dc7f5d0125f90532f866e141\" tg-width=\"640\" tg-height=\"390\"></p>\n<p>Source: YCharts</p>\n<p>As I detailed in my previous article, DraftKings is spending to grab market share in an emerging industry. Don't forget that a lot of this spending will also aggressively market in newly launched states. Eventual profitability is important over the long term, but part of this process is for DraftKings to acquire the scale needed to maximize the unit economics of the business.</p>\n<p>There are signs that DraftKings has had success thus far. In Q1, the company's ARPU (average revenue per user) was $61, a notable increase over the $41 it generated a year ago.</p>\n<p>This is something that investors will need to continue monitoring. What will be key is the eventual plateau of marketing spend as the platform grows large enough to draw users in more organically.</p>\n<p><b>A More Compelling Entry Point</b></p>\n<p>Shares of DraftKings have cooled slightly over the past several months, now sitting about 35% below highs at $48 per share.</p>\n<p><img src=\"https://static.tigerbbs.com/947874e9faff15a78a04538a5298d35b\" tg-width=\"640\" tg-height=\"384\"></p>\n<p>Source: YCharts</p>\n<p>Based on analyst estimates, DraftKings is currently trading at an EV/sales of 15X on a forward basis. With analysts projecting strong growth over the coming years (90% in 2021 and high 30s after that), DraftKings offers an attractive entry point that will see multiples aggressively compress over the short-medium time frames as growth continues.</p>\n<p><b>Wrapping Up</b></p>\n<p>DraftKings is growing \"at all costs,\" so there is risk involved in the near term. However, the recent pullback gives investors a margin of safety because strong revenue growth will quickly compress valuations from here. The company's revenues are poised to continue expanding rapidly as the iGaming and sports betting markets come into their own. Eventually, profitability will become a more critical aspect of the business, but that time isn't now.</p>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>DraftKings' Stumble Offers An Opportunity</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nDraftKings' Stumble Offers An Opportunity\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-22 15:06 GMT+8 <a href=https://seekingalpha.com/article/4435911-draftkings-stumble-offers-an-opportunity><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nDraftKings has pulled back after a broader pullback on growth stocks and a short report targeting the betting company.\nHowever, DraftKings continues to grow at a torrid pace and innovate ...</p>\n\n<a href=\"https://seekingalpha.com/article/4435911-draftkings-stumble-offers-an-opportunity\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"DKNG":"DraftKings Inc."},"source_url":"https://seekingalpha.com/article/4435911-draftkings-stumble-offers-an-opportunity","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1139414035","content_text":"Summary\n\nDraftKings has pulled back after a broader pullback on growth stocks and a short report targeting the betting company.\nHowever, DraftKings continues to grow at a torrid pace and innovate along the way.\nDraftKings offers a more compelling risk/reward after a 20% drop since my last look at them.\n\nFantasy sports and betting platform DraftKings Inc. (DKNG) has steadily slid lower since mid-March. The most recent piece of bad news, a short report, claimed that the company is concealing illegal activities. Shares have come down 35% from highs.\nHowever, at an operational level, DraftKings continues to grow and innovate. The company posted strong Q1 results and is investing heavily to lay the groundwork to be the primary player in sports betting, an industry that is continuing to blossom. While DraftKings continues to carry some risks that investors should be aware of, the pullback has offered a more compelling risk/reward entry for investors.\nDraftKings Continues To Grow & Innovate\nDraftKings reported its Q1 earnings for 2021 in May, and results showed a glimpse into the company's continued upward trajectory. The business is growing at a rapid rate and continues to innovate.\nFor the quarter, DraftKings reported revenues of $312 million, year over year growth of 175% on a Pro-forma basis. This growth was driven in part by new state launches in Michigan and Virginia. The betting and iGaming landscape is still developing, so new state launches will continue to play an important role in growth for the foreseeable future.\nAdditionally, DraftKings is innovating to drive engagement (and thus revenue growth) on the platform. It recently launched \"Spanish 21\", a variant game of Blackjack, and it is currently unique among iGaming operators to DraftKings.\n\nSource: DraftKings Inc.\nThe more impactful innovation that DraftKings is working on is the features that it is adding to turn DraftKings into a one-stop-shop platform for a gaming experience. There are two great examples of this in the works. DraftKings is collaborating with SLING TV to launch sports betting information channels. This ties real-time sports updates into betting odds, producing a more engaging experience for customers.\n\nSource: DraftKings Inc.\nDraftKings is also launching social media features on its platform that will allow customers to interact with each other by friending, commenting, and sharing bets with others.\n\nSource: DraftKings Inc.\nThis is a great opportunity for DraftKings, as there are high-profile gamblers on traditional social media platforms already that prove this concept out. I wouldn't be surprised to see DraftKings spending to bring high-profile bettors onto DraftKings' platform as an effort to attract followers that can \"play along\" with these betting celebrities.\nAbout The Short Report\nShares of DraftKings took a recent tumble when a short report emerged, accusing the company of concealing illegal activity from the public.\nInvestors should consider every bear case, soyou can find it herefor those interested in checking it out.\nThe report is based on a lot of insinuation (typical of short reports), so I won't go into a ton of detail here. The basic point of the report is that a segment of DraftKings known as SBTech before the SPAC merger is involved in black market dealings, and it's being hidden from regulators and investors.\nI didn't find enough credible evidence of this upon reading the report, and I like to think that all of the partnerships that DraftKings has amassed are a sign of things being done properly. Nonetheless, investors can read and decide for themselves.\nThe Risk That Investors Should Keep Eyes On\nIf there is a legitimate reason for caution on DraftKings, I believe it to be the company's rapid cash-burning that continues to take place.\nI wrote about it in my previous article on DraftKings,which can be found here.\nDraftKings aggressively spends on sales and marketing to grow revenue, as we can see that this expense category alone almost eclipses revenues despite the company's top-line growth.\n\nSource: YCharts\nAs I detailed in my previous article, DraftKings is spending to grab market share in an emerging industry. Don't forget that a lot of this spending will also aggressively market in newly launched states. Eventual profitability is important over the long term, but part of this process is for DraftKings to acquire the scale needed to maximize the unit economics of the business.\nThere are signs that DraftKings has had success thus far. In Q1, the company's ARPU (average revenue per user) was $61, a notable increase over the $41 it generated a year ago.\nThis is something that investors will need to continue monitoring. What will be key is the eventual plateau of marketing spend as the platform grows large enough to draw users in more organically.\nA More Compelling Entry Point\nShares of DraftKings have cooled slightly over the past several months, now sitting about 35% below highs at $48 per share.\n\nSource: YCharts\nBased on analyst estimates, DraftKings is currently trading at an EV/sales of 15X on a forward basis. With analysts projecting strong growth over the coming years (90% in 2021 and high 30s after that), DraftKings offers an attractive entry point that will see multiples aggressively compress over the short-medium time frames as growth continues.\nWrapping Up\nDraftKings is growing \"at all costs,\" so there is risk involved in the near term. However, the recent pullback gives investors a margin of safety because strong revenue growth will quickly compress valuations from here. The company's revenues are poised to continue expanding rapidly as the iGaming and sports betting markets come into their own. Eventually, profitability will become a more critical aspect of the business, but that time isn't now.","news_type":1},"isVote":1,"tweetType":1,"viewCount":125,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"hots":[{"id":129024784,"gmtCreate":1624346299148,"gmtModify":1703834059972,"author":{"id":"4087445069188990","authorId":"4087445069188990","name":"CT88","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":2,"crmLevelSwitch":0,"followedFlag":false,"idStr":"4087445069188990","authorIdStr":"4087445069188990"},"themes":[],"htmlText":"Good","listText":"Good","text":"Good","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/129024784","repostId":"1139414035","repostType":4,"repost":{"id":"1139414035","kind":"news","pubTimestamp":1624345572,"share":"https://ttm.financial/m/news/1139414035?lang=&edition=fundamental","pubTime":"2021-06-22 15:06","market":"us","language":"en","title":"DraftKings' Stumble Offers An Opportunity","url":"https://stock-news.laohu8.com/highlight/detail?id=1139414035","media":"seekingalpha","summary":"Summary\n\nDraftKings has pulled back after a broader pullback on growth stocks and a short report tar","content":"<p><b>Summary</b></p>\n<ul>\n <li>DraftKings has pulled back after a broader pullback on growth stocks and a short report targeting the betting company.</li>\n <li>However, DraftKings continues to grow at a torrid pace and innovate along the way.</li>\n <li>DraftKings offers a more compelling risk/reward after a 20% drop since my last look at them.</li>\n</ul>\n<p>Fantasy sports and betting platform DraftKings Inc. (DKNG) has steadily slid lower since mid-March. The most recent piece of bad news, a short report, claimed that the company is concealing illegal activities. Shares have come down 35% from highs.</p>\n<p>However, at an operational level, DraftKings continues to grow and innovate. The company posted strong Q1 results and is investing heavily to lay the groundwork to be the primary player in sports betting, an industry that is continuing to blossom. While DraftKings continues to carry some risks that investors should be aware of, the pullback has offered a more compelling risk/reward entry for investors.</p>\n<p><b>DraftKings Continues To Grow & Innovate</b></p>\n<p>DraftKings reported its Q1 earnings for 2021 in May, and results showed a glimpse into the company's continued upward trajectory. The business is growing at a rapid rate and continues to innovate.</p>\n<p>For the quarter, DraftKings reported revenues of $312 million, year over year growth of 175% on a Pro-forma basis. This growth was driven in part by new state launches in Michigan and Virginia. The betting and iGaming landscape is still developing, so new state launches will continue to play an important role in growth for the foreseeable future.</p>\n<p>Additionally, DraftKings is innovating to drive engagement (and thus revenue growth) on the platform. It recently launched \"Spanish 21\", a variant game of Blackjack, and it is currently unique among iGaming operators to DraftKings.</p>\n<p><img src=\"https://static.tigerbbs.com/38bef09e9a4a3b68cab2d9bc336ac15b\" tg-width=\"640\" tg-height=\"192\"></p>\n<p>Source: DraftKings Inc.</p>\n<p>The more impactful innovation that DraftKings is working on is the features that it is adding to turn DraftKings into a one-stop-shop platform for a gaming experience. There are two great examples of this in the works. DraftKings is collaborating with SLING TV to launch sports betting information channels. This ties real-time sports updates into betting odds, producing a more engaging experience for customers.</p>\n<p><img src=\"https://static.tigerbbs.com/ca4d93bb27aaf7fd36bdfc6e3734a43a\" tg-width=\"640\" tg-height=\"199\"></p>\n<p>Source: DraftKings Inc.</p>\n<p>DraftKings is also launching social media features on its platform that will allow customers to interact with each other by friending, commenting, and sharing bets with others.</p>\n<p><img src=\"https://static.tigerbbs.com/5a5c6faace4c411e5a7e2976c2ae702f\" tg-width=\"640\" tg-height=\"384\"></p>\n<p>Source: DraftKings Inc.</p>\n<p>This is a great opportunity for DraftKings, as there are high-profile gamblers on traditional social media platforms already that prove this concept out. I wouldn't be surprised to see DraftKings spending to bring high-profile bettors onto DraftKings' platform as an effort to attract followers that can \"play along\" with these betting celebrities.</p>\n<p><b>About The Short Report</b></p>\n<p>Shares of DraftKings took a recent tumble when a short report emerged, accusing the company of concealing illegal activity from the public.</p>\n<p><i>Investors should consider every bear case, soyou can find it herefor those interested in checking it out.</i></p>\n<p>The report is based on a lot of insinuation (typical of short reports), so I won't go into a ton of detail here. The basic point of the report is that a segment of DraftKings known as SBTech before the SPAC merger is involved in black market dealings, and it's being hidden from regulators and investors.</p>\n<p>I didn't find enough credible evidence of this upon reading the report, and I like to think that all of the partnerships that DraftKings has amassed are a sign of things being done properly. Nonetheless, investors can read and decide for themselves.</p>\n<p><b>The Risk That Investors Should Keep Eyes On</b></p>\n<p>If there is a legitimate reason for caution on DraftKings, I believe it to be the company's rapid cash-burning that continues to take place.</p>\n<p><i>I wrote about it in my previous article on DraftKings,which can be found here.</i></p>\n<p>DraftKings aggressively spends on sales and marketing to grow revenue, as we can see that this expense category alone almost eclipses revenues despite the company's top-line growth.</p>\n<p><img src=\"https://static.tigerbbs.com/f23d5da6dc7f5d0125f90532f866e141\" tg-width=\"640\" tg-height=\"390\"></p>\n<p>Source: YCharts</p>\n<p>As I detailed in my previous article, DraftKings is spending to grab market share in an emerging industry. Don't forget that a lot of this spending will also aggressively market in newly launched states. Eventual profitability is important over the long term, but part of this process is for DraftKings to acquire the scale needed to maximize the unit economics of the business.</p>\n<p>There are signs that DraftKings has had success thus far. In Q1, the company's ARPU (average revenue per user) was $61, a notable increase over the $41 it generated a year ago.</p>\n<p>This is something that investors will need to continue monitoring. What will be key is the eventual plateau of marketing spend as the platform grows large enough to draw users in more organically.</p>\n<p><b>A More Compelling Entry Point</b></p>\n<p>Shares of DraftKings have cooled slightly over the past several months, now sitting about 35% below highs at $48 per share.</p>\n<p><img src=\"https://static.tigerbbs.com/947874e9faff15a78a04538a5298d35b\" tg-width=\"640\" tg-height=\"384\"></p>\n<p>Source: YCharts</p>\n<p>Based on analyst estimates, DraftKings is currently trading at an EV/sales of 15X on a forward basis. With analysts projecting strong growth over the coming years (90% in 2021 and high 30s after that), DraftKings offers an attractive entry point that will see multiples aggressively compress over the short-medium time frames as growth continues.</p>\n<p><b>Wrapping Up</b></p>\n<p>DraftKings is growing \"at all costs,\" so there is risk involved in the near term. However, the recent pullback gives investors a margin of safety because strong revenue growth will quickly compress valuations from here. The company's revenues are poised to continue expanding rapidly as the iGaming and sports betting markets come into their own. Eventually, profitability will become a more critical aspect of the business, but that time isn't now.</p>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>DraftKings' Stumble Offers An Opportunity</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nDraftKings' Stumble Offers An Opportunity\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-06-22 15:06 GMT+8 <a href=https://seekingalpha.com/article/4435911-draftkings-stumble-offers-an-opportunity><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Summary\n\nDraftKings has pulled back after a broader pullback on growth stocks and a short report targeting the betting company.\nHowever, DraftKings continues to grow at a torrid pace and innovate ...</p>\n\n<a href=\"https://seekingalpha.com/article/4435911-draftkings-stumble-offers-an-opportunity\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"DKNG":"DraftKings Inc."},"source_url":"https://seekingalpha.com/article/4435911-draftkings-stumble-offers-an-opportunity","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"1139414035","content_text":"Summary\n\nDraftKings has pulled back after a broader pullback on growth stocks and a short report targeting the betting company.\nHowever, DraftKings continues to grow at a torrid pace and innovate along the way.\nDraftKings offers a more compelling risk/reward after a 20% drop since my last look at them.\n\nFantasy sports and betting platform DraftKings Inc. (DKNG) has steadily slid lower since mid-March. The most recent piece of bad news, a short report, claimed that the company is concealing illegal activities. Shares have come down 35% from highs.\nHowever, at an operational level, DraftKings continues to grow and innovate. The company posted strong Q1 results and is investing heavily to lay the groundwork to be the primary player in sports betting, an industry that is continuing to blossom. While DraftKings continues to carry some risks that investors should be aware of, the pullback has offered a more compelling risk/reward entry for investors.\nDraftKings Continues To Grow & Innovate\nDraftKings reported its Q1 earnings for 2021 in May, and results showed a glimpse into the company's continued upward trajectory. The business is growing at a rapid rate and continues to innovate.\nFor the quarter, DraftKings reported revenues of $312 million, year over year growth of 175% on a Pro-forma basis. This growth was driven in part by new state launches in Michigan and Virginia. The betting and iGaming landscape is still developing, so new state launches will continue to play an important role in growth for the foreseeable future.\nAdditionally, DraftKings is innovating to drive engagement (and thus revenue growth) on the platform. It recently launched \"Spanish 21\", a variant game of Blackjack, and it is currently unique among iGaming operators to DraftKings.\n\nSource: DraftKings Inc.\nThe more impactful innovation that DraftKings is working on is the features that it is adding to turn DraftKings into a one-stop-shop platform for a gaming experience. There are two great examples of this in the works. DraftKings is collaborating with SLING TV to launch sports betting information channels. This ties real-time sports updates into betting odds, producing a more engaging experience for customers.\n\nSource: DraftKings Inc.\nDraftKings is also launching social media features on its platform that will allow customers to interact with each other by friending, commenting, and sharing bets with others.\n\nSource: DraftKings Inc.\nThis is a great opportunity for DraftKings, as there are high-profile gamblers on traditional social media platforms already that prove this concept out. I wouldn't be surprised to see DraftKings spending to bring high-profile bettors onto DraftKings' platform as an effort to attract followers that can \"play along\" with these betting celebrities.\nAbout The Short Report\nShares of DraftKings took a recent tumble when a short report emerged, accusing the company of concealing illegal activity from the public.\nInvestors should consider every bear case, soyou can find it herefor those interested in checking it out.\nThe report is based on a lot of insinuation (typical of short reports), so I won't go into a ton of detail here. The basic point of the report is that a segment of DraftKings known as SBTech before the SPAC merger is involved in black market dealings, and it's being hidden from regulators and investors.\nI didn't find enough credible evidence of this upon reading the report, and I like to think that all of the partnerships that DraftKings has amassed are a sign of things being done properly. Nonetheless, investors can read and decide for themselves.\nThe Risk That Investors Should Keep Eyes On\nIf there is a legitimate reason for caution on DraftKings, I believe it to be the company's rapid cash-burning that continues to take place.\nI wrote about it in my previous article on DraftKings,which can be found here.\nDraftKings aggressively spends on sales and marketing to grow revenue, as we can see that this expense category alone almost eclipses revenues despite the company's top-line growth.\n\nSource: YCharts\nAs I detailed in my previous article, DraftKings is spending to grab market share in an emerging industry. Don't forget that a lot of this spending will also aggressively market in newly launched states. Eventual profitability is important over the long term, but part of this process is for DraftKings to acquire the scale needed to maximize the unit economics of the business.\nThere are signs that DraftKings has had success thus far. In Q1, the company's ARPU (average revenue per user) was $61, a notable increase over the $41 it generated a year ago.\nThis is something that investors will need to continue monitoring. What will be key is the eventual plateau of marketing spend as the platform grows large enough to draw users in more organically.\nA More Compelling Entry Point\nShares of DraftKings have cooled slightly over the past several months, now sitting about 35% below highs at $48 per share.\n\nSource: YCharts\nBased on analyst estimates, DraftKings is currently trading at an EV/sales of 15X on a forward basis. With analysts projecting strong growth over the coming years (90% in 2021 and high 30s after that), DraftKings offers an attractive entry point that will see multiples aggressively compress over the short-medium time frames as growth continues.\nWrapping Up\nDraftKings is growing \"at all costs,\" so there is risk involved in the near term. However, the recent pullback gives investors a margin of safety because strong revenue growth will quickly compress valuations from here. The company's revenues are poised to continue expanding rapidly as the iGaming and sports betting markets come into their own. Eventually, profitability will become a more critical aspect of the business, but that time isn't now.","news_type":1},"isVote":1,"tweetType":1,"viewCount":125,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"lives":[]}
