Discounted Cash Flow (DCF) Analysis Unlevered

DraftKings Inc. (DKNG)

$18.31

+1.08 (+6.27%)

All numbers are in Millions, Currency in USD

Stock DCF: -985.23 | 18.31 | overvalue

Operating Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	226.28	323.41	614.53	1,296.02	2,240.46	4,014.41	7,192.92	12,888.12	23,092.64	41,376.88
Revenue (%)
EBITDA	-68.62	-129.04	-767.48	-1,391.83	-1,122.17	-2,830.89	-5,072.33	-9,088.48	-16,284.53	-29,178.25
EBITDA (%)
EBIT	-76.12	-142.68	-844.89	-1,512.97	-1,291.42	-3,128.18	-5,605.01	-10,042.93	-17,994.69	-32,242.48
EBIT (%)
Depreciation	7.50	13.64	77.41	121.14	169.25	297.29	532.68	954.45	1,710.16	3,064.22
Depreciation (%)

Balance Sheet Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Total Cash	117.91	480.49	1,820.21	2,152.89	1,309.17	5,792.17	10,378.27	18,595.55	33,319.09	59,700.40
Total Cash (%)
Account Receivables	21.33	19.83	74.77	97.81	51.10	301.52	540.25	968	1,734.45	3,107.75
Account Receivables (%)
Inventories	-	-	-	-	-	-	-	-	-	-
Inventories (%)
Accounts Payable	11.63	16.62	28.08	52.54	517.59	337.21	604.21	1,082.62	1,939.81	3,475.70
Accounts Payable (%)
Capital Expenditure	-26.67	-42.27	-47.70	-98.28	-32.40	-334.39	-599.14	-1,073.53	-1,923.53	-3,446.54
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 18.31
Beta	1.798
Diluted Shares Outstanding	305.59
Cost of Debt
Tax Rate	4.50
After-tax Cost of Debt	1.35%
Risk-Free Rate
Market Risk Premium
Cost of Equity	12.095
Total Debt	1,324.69
Total Equity	5,595.41
Total Capital	6,920.10
Debt Weighting	19.14
Equity Weighting	80.86
Wacc

Build Up Free Cash

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	226.28	323.41	614.53	1,296.02	2,240.46	4,014.41	7,192.92	12,888.12	23,092.64	41,376.88
EBITDA	-68.62	-129.04	-767.48	-1,391.83	-1,122.17	-2,830.89	-5,072.33	-9,088.48	-16,284.53	-29,178.25
EBIT	-76.12	-142.68	-844.89	-1,512.97	-1,291.42	-3,128.18	-5,605.01	-10,042.93	-17,994.69	-32,242.48
Tax Rate	-0.14%	-0.38%	0.01%	-0.37%	4.50%	0.73%	0.73%	0.73%	0.73%	0.73%
EBIAT	-76.22	-143.21	-844.84	-1,518.50	-1,233.27	-3,105.49	-5,564.34	-9,970.06	-17,864.12	-32,008.53
Depreciation	7.50	13.64	77.41	121.14	169.25	297.29	532.68	954.45	1,710.16	3,064.22
Accounts Receivable	-	1.51	-54.94	-23.04	46.72	-250.42	-238.73	-427.76	-766.44	-1,373.30
Inventories	-	-	-	-	-	-	-	-	-	-
Accounts Payable	-	4.99	11.46	24.46	465.05	-180.37	267	478.40	857.19	1,535.89
Capital Expenditure	-26.67	-42.27	-47.70	-98.28	-32.40	-334.39	-599.14	-1,073.53	-1,923.53	-3,446.54
UFCF	-95.39	-165.35	-858.61	-1,494.22	-584.66	-3,573.37	-5,602.54	-10,038.50	-17,986.75	-32,228.26
WACC
PV UFCF						-3,247.34	-4,626.83	-7,533.85	-12,267.34	-19,974.87
SUM PV UFCF										-47,650.22

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	10.04
Free cash flow (t + 1)	-32,872.82
Terminal Value	-408,865.93
Present Value of Terminal Value	-253,412.49

Intrinsic Value

Enterprise Value	-301,062.71
Net Debt	15.52
Equity Value	-301,078.23
Shares Outstanding	305.59
Equity Value Per Share	-985.23