The 3 markets of Fantasy Sports, Sports Betting & iGaming are a large $70B TAM driving rapid expansion for $DKNG

Price: $58.12
Market Cap: $23B
52 WKL – 52WKH: $16.11 - $74.38
Shares outstanding: 397M

$DKNG Daily Fantasy Sports (DFS), Online Sports Betting (OSB) and iGaming are the 3 elements of “Online Gaming” each with different requirements and solutions

$DKNG From 25% of potential US target audience to 100% of US users, the market for iGaming alone could exceed $40B (Top-down market analysis)

$DKNG Online Sports Betting (OSB) has a $20B Market size potential by 2030 – Bottoms Up market analysis

Online Sports Betting is gaining more traction among many states in the US, giving $DKNG an opportunity to be a market leader with an early lead

$DKNG OSB is legal in 12 states which represents 27% of US population, while iGaming is at 11%

$DKNG Online Sports Betting & Fantasy Sports depends on Sports being played which will increase as US recovers from Covid

$DKNG offers fantasy sports contests for players and launched a sports book NJ (2018). It was the first company to offer legal, mobile and online sports betting

$DKNG could achieve $5 - $7.5B in revenue for US alone by 2025 implying 40% CAGR from current revenues of $1B (Est) for 2021

Sports betting & iGaming surveys indicate terrific brand awareness for $DKNG (and competitor FanDuel - LSE: $FLTR

$DKNG: NJ’s first football season performed near the mid point of all OSB states which indicates strong growth going forward

$DKNG gross margins are improving across all offerings as they scale and offer a vertical integrated solution from Sportsbook to iGaming and software

Of the 3 OSB operators in 10+ states, $DKNG is live in more states than other operators with $FLTR, $MGM and others further behind

$DKNG makes money by charging fees for Fantasy sports (by user), being a bookmaker on Online Sports betting, fees on iGaming and software fees on SBTech

$DKNG MUP (monthly unique payers) and ARPMUP (average revenue per MUP) are maintaining a fast-growing speed with legalization and heavy marketing/promotion

$DKNG revenue growth has been showing over 40% CAGR with accelerating revenue and forward guidance to $1B in 2021 vs $700M guided earlier in 2020

$DKNG raised guidance for both long-term revenue and EBITDA to $1.7B indicating confidence in its business over the next 3 years

The risk with $DKGN however is its valuation is higher than 26 of its peers by nearly 3X only justified by its revenue scale and growth

Among its closest peers $DKNG has revenue at scale and growth to justify the rich valuation

$DKNG has been aggressively acquiring companies to expand its footprint including Blue Ribbon, VSNI and SBTech ( at SPAC merger)

$DKNG execution of acquisitions has been consistent and exceeded most analyst expectations for revenue, EBITDA and growth

$DKNG has a good set of moats with its user data, sports data and ability to upsell users to multiple products across their platform