DraftKings is the Best Way to Play North American Betting Market Says Analyst
Posted on: August 8, 2025, 01:16h.
Last updated on: August 8, 2025, 01:29h.
- DraftKings delivered impressive Q2 results and forecast 2025 revenue at the high end of its previously disclosed forecast
- Analyst sees “long structural hold runway” and leading in-game betting platform
DraftKings (NASDAQ: DKNG) gave back some of its post-earnings gains Friday, but Wall Street remains enthusiastic on shares of the internet casino and online sportsbook giant.
In a note to clients on Friday, Macquarie analyst Chad Beynon said DraftKings is the best way to play the North American online wagering market, adding the company’s second-quarter results only fortify confidence in that claim.
DKNG has a long structural hold runway which, combined with handle market share gains and best-in-class in-play offering, position DKNG for strong top- and bottom- line outperformance in the near future,” observes Beynon who rates the stock “outperform” with a $55 price target, up from $53.
In the June quarter, Boston-based DraftKings posted revenue of $1.51 billion, a 37% year-over-year jump, on net income of $158 million and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $301 million — both quarterly records. At this writing, the stock is on pace for a modest weekly decline, but that could be the result of profit-taking following a gain of 22.26% over the past 90 days.
DraftKings Attractively Valued on Some Metrics
In about five years as a publicly traded company, rare have the occasions been that DraftKings was viewed as an inexpensive stock, at least not by metrics such as price-to-earnings.
That makes sense because it’s a growth stock and as such, it’s often commanded premium valuations. Interestingly, Beynon points out that on the basis of enterprise value/earnings before interest, taxes, depreciation, and amortization (EBITDA) and free cash flow (FCF), DraftKings trades at notable discounts to some members of the S&P 500.
Current 2025 guidance implies 24x EV/EBITDA and FCF of 3% (rising to FCF yields of 5%/7% in ’26E/27E, in our view). We note S&P 500 companies with a 2024-26E revenue CAGR of 15-20% trade at 31x 2025E EBITDA and 2.5% FCF yield,” adds the analyst.
DraftKings isn’t yet a member of the S&P 500, but its market capitalization of $22.51 billion and increasingly consistent profitability could position it to be included in the all-important gauge over the medium term. That said, the most logical gaming stock to join that index anytime soon is FanDuel parent Flutter Entertainment (NYSE: FLUT).
DraftKings is a Catalyst-Rich Story
DraftKings is up a solid 16.18% year to date, but that doesn’t imply upside from here is limited. Rather, there are potential tailwinds for investors to consider. Those include the aforementioned compelling valuation, the operator’s documented dedication to buying back its shares, and the upcoming start of football season.
Additionally, the company’s 2025 guidance now accounts for recent tax increases in Illinois, Louisiana, and New Jersey, indicating DraftKings’ overall business is in strong enough shape to weather hostile state-level tax policy. Beynon sees more growth ahead.
“DKNG is a leader in the fast-growing US Online Gaming industry,” concludes the Macquarie analyst. We believe the company, which has transitioned to profitability, is well-positioned for double-digit revenue growth.”
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