Calculate enterprise value (EV) in the future.

Estimate the future size of legalized sports betting market.

Estimate EBITDA margin (Earnings before interest, taxes, depreciation, and amortization).

Various methods used to value a sports betting operator Based on Friday’s closing price, DraftKings eclipsed the total market capitalization of The Madison Square Garden Company, Under Armour, and Macy’s Inc. and SBTech that valued the new company at approximately $3.3 billion.ĭraftKings’ current market valuation is more than 15 times its projected 2021 revenue of about $700 million. Two days before Christmas last December, DraftKings announced a definitive business combination agreement with Diamond Eagle Acquisition Corp. In DraftKings’ case, however, some of the company’s long-term projections provide a crystal ball for how the sports betting and Daily Fantasy Sports (DFS) leader could look over the next decade.ĭraftKings traded Monday above $42 per share, giving the company a market capitalization in excess of $13 billion.

sports betting market is complicated by the fact that the market is less than three years old. Valuation methods for sports betting companiesĭetermining the valuation of a company is a highly subjective exercise that in many cases can lead to wildly disparate results. “I am confident that the new DraftKings will progress our goal of offering the best, most innovative sports and gaming products to our customers,” Robins, the company’s CEO, said of the milestone. Roughly eight years to the day from when DraftKings launched operations in a spare room in co-founder Paul Liberman’s home in Watertown, Mass., the company began trading in April on the Nasdaq Global Select Market as a multi-billion dollar company. Possessing characteristics that more closely resemble a tech stock than a European sports betting shop, DraftKings appeals to investors in it for the long haul. A sizzling start, in which DraftKings’ shares have more than doubled since its April debut, augurs well not only for the company’s long-term viability but for publicly traded sports betting stocks in general.

Since then, DraftKings has embarked on a meteoric rise, skyrocketing from just over $20 to $40 a share in recent sessions. Sporting a pencil-thin mustache and a quarantine beard, much like thousands of millennial sports bettors during the global pandemic, Jason Robins took part in a virtual opening bell-ringing ceremony on the morning of April 24 to toast DraftKings’ entry into the public market.

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