Draft Kings I personally believe is worth double what it is now. However, sports not being played all that makes it scary for investors. With news on earnings today I think you see a big time change. I think it will consolidate in the corner forming an ascending triangle and breakout the top. If it doesn't I also marked put options where to enter and wher to check on the way down.
Personally I am long not just on 30% rev earnings, but I love draft kings myself, their customer support, overall experience and its a money making machine with little overhead.
I'm curious how you have come to the conclusion that Draft Kings is "worth double what it is now"? Worth being the key word. Certainly mania can drive anything up completely disconnected from fundamental valuations, but it's very different to say that the price is going to double vs. saying that the underlying company is worth double.
DKNG
P/E ratio is 560
Price-To-Book is 207
Market-Cap to Enterprise Value is over 20:1
Compare those values to AAPL (I'm not saying Apple is cheap either, only by comparison):
P/E ratio is 24
Price-To-Book is 15
Market-Cap to Enterprise Value is barely over 1:1
Even at 30% YoY Revenue growth, Draft Kings will need to maintain that growth for well over a decade to bring their valuation metrics in line with Apple given the current price of DKNG. If the price of DKNG doubles then you're looking at 20-30+ years before revenue catches up to stock price.
Draft Kings has already been in business for 8 years, why are they all of the sudden capable of SUSTAINED growth?
I'm pretty certain there is not a company in the history of the world which has come close to pulling off that kind of sustained growth over multiple decades. Do you really think Draft Kings will be the first?
TL/DR: The stock might keep going up, but that doesn't mean fundamentals justify the price.
IMHO: This is a bubble that will pop. Enjoy the ride but be sure to have downside protection, if not then be prepared to lose 90%. It's not a question of if it will pop, only when.
DigitalData
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@RobBiddle this didn’t age well did it? Might want to understand what value investing and it was 30% during the virus. But if you’re so bearish go and put some puts on it. Unfortunately it’s already gone up 1/4 of my guess lol.
RobBiddle
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@DigitalData, It's only been a few days, so the comment hasn't really aged yet lol. I stand by it, the fundamentals are what they are. I've been playing both sides with DKNG because you don't fight irrational buyers. It will come crashing down eventually, unless they start putting up 4 digit % revenue gains.
DigitalData
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@RobBiddle, It's extremely obvious you have no idea what you are talking about. The fact you think revenue matters that much shows how little you understand about trading especially in 2020. Go look at NNDM buddy. Fundamentals lag the stock. Take an accounting course lmao. It's called price action.
100% of the time Price action > "fundamentals". They report out "fundamentals" after the price has moved, news and everything else LOL. Good luck with that... go look at literally and chart. Please stay off my posts.
RobBiddle
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@DigitalData, Revenue doesn't matter? Ok. Good luck gambling on your gambling stock.
DigitalData
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@RobBiddle, if you noticed it literally doubled :)
RobBiddle
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@DigitalData, I did notice. I guess fundamentals don't matter anymore. It's different this time. Stonks only go up.