You bought more DraftKings. DraftKings is up 14% in a month. It's great when you can have these midcap, small cap names ride the coattails, but I mean your true investment are in the large cap.It's fun to get into some of these smaller names. We bought DraftKings. To your point, it's up 14%.I like the momentum, but this is like a dualopoly. They have 80% of the market share in combined with um the other name DraftKing and FanDuel. Thank you.Yeah, FanDuel. So 80%. And you've only got 25 states so far for Dra ...

Core Insights - DraftKings Inc. is shifting from a high-growth model to a disciplined, cash-generating business, with 2025 expected to be a pivotal year for the company [1] - The company has reaffirmed its free cash flow target of $750 million, indicating improvements in core business fundamentals such as margin expansion and promotional efficiency [1][5] - Despite short-term volatility from sports outcomes, DraftKings is leveraging strong operational capabilities to pursue long-term cash generation [1] Financial Performance - In Q1 2025, DraftKings reported $103 million in adjusted EBITDA, a significant increase from $22.4 million in the same period last year, despite a $170 million revenue hit from unfavorable sports outcomes [2] - Management anticipates a substantial increase in EBITDA for Q2, projecting it to exceed $200 million, driven by sportsbook handle [2] - The structural sportsbook hold is expected to rise from 10.4% in Q1, contributing to improved net revenue margins in the range of 7-7.5% [3] Margin and Revenue Expectations - DraftKings expects to generate an additional $50 million in revenues and $37 million in EBITDA in 2025 through optimized promotional spending and improved margins [3] - The company forecasts an adjusted gross margin of 46% in 2025, reflecting an increase of over 300 basis points year-over-year [3] Regulatory Environment - The operating environment remains challenging due to regulatory issues, including Maryland's tax hike on sports betting and Jackpocket's exit from digital lottery operations, which together are expected to impact revenues by $30 million and EBITDA by $26 million [4] Capital Discipline - DraftKings is maintaining strong capital discipline, with an expected $100 million gap between adjusted EBITDA and free cash flow, supported by low capital expenditures and controlled working capital [5] - The company has $1.1 billion in cash on its balance sheet, positioning it well to meet its 2025 free cash flow target [5] Stock Performance and Valuation - DraftKings shares have increased by 24% over the past three months, compared to the industry's growth of 40.5% [6] - The stock is currently trading at a forward 12-month price-to-sales multiple of 5.31X, significantly higher than the industry average of 3.66X [7] Earnings Estimates - The Zacks Consensus Estimate for DraftKings' 2025 earnings per share has been revised upward from $1.40 to $1.46, indicating strong analyst confidence in the stock's near-term prospects [8] - Projections suggest a 239.1% rise in earnings for DraftKings in 2025, while competitors like Accel Entertainment and Boyd Gaming are expected to see declines [10]

Group 1 - Building Benjamins is a free stock picking and market commentary investment newsletter published by Tradition Investment Management, LLC [1] - Benjamin Halliburton, the founder, has a notable background in investment, having founded Tradition Capital Management in 2000 and received multiple accolades for his performance [1] - Halliburton has extensive experience in the investment field, starting his career at Merrill Lynch in 1986 and earning an MBA with a focus on finance from Duke's Fuqua School of Business in 1990 [1] Group 2 - Halliburton was recognized as the top-performing portfolio manager at Brundage, Story and Rose, where his "Disciplined Growth Strategy" outperformed the S&P 500 during the 1990s bull market [1] - He was the youngest partner at his firm and received high praise from senior managing partners for his investment acumen [1]

Core Insights - DraftKings has launched a new Responsible Gaming tool called My Budget Builder, aimed at helping players manage their entertainment budgets across various platforms [1][2] - The tool allows players to set customized limits and reminders for their gaming activities, reflecting DraftKings' commitment to promoting responsible gaming [2][3] Group 1: My Budget Builder Features - My Budget Builder is designed to be intuitive, proactive, and personalized, enabling players to create a gaming budget based on deposit amounts, total wagers, maximum wager size, loss limits, time spent, contest entries, and contest fees [2] - Players can set limits or reminders for a specified duration (e.g., day, week, or month), and while limits can be decreased at any time, they cannot be increased until the selected time period expires [2] Group 2: Commitment to Responsible Gaming - The introduction of My Budget Builder enhances DraftKings' existing Responsible Gaming initiatives, which focus on accessibility, education, and innovation [3] - This new tool complements the previously launched My Stat Sheet, which has recorded over 20 million visits and provides players with insights into their gaming activity [3] Group 3: Company Overview - DraftKings Inc. is a digital sports entertainment and gaming company that operates in various sectors, including daily fantasy sports and regulated gaming [5] - The company is headquartered in Boston and is the only U.S.-based vertically integrated sports betting operator, with operations in 28 states and Ontario, Canada [5]

Company Performance - DraftKings (DKNG) closed at $42.24, reflecting a -1.17% change from the previous day, underperforming the S&P 500 which gained 0.8% [1] - The stock has increased by 22.05% over the past month, outperforming the Consumer Discretionary sector's gain of 4.49% and the S&P 500's gain of 5.12% [1] Earnings Forecast - DraftKings is expected to report an EPS of $0.4, representing a 233.33% increase from the same quarter last year [2] - The projected revenue for the upcoming earnings report is $1.38 billion, up 25.37% from the previous year [2] Annual Estimates - For the entire year, the forecasted earnings are $1.36 per share and revenue is expected to be $6.27 billion, indicating increases of +229.52% and +31.46% respectively compared to the previous year [3] Analyst Sentiment - Recent changes to analyst estimates for DraftKings are important as they reflect short-term business trends, with positive revisions indicating analyst optimism [3] - The Zacks Consensus EPS estimate has decreased by 6.67% over the past month, and DraftKings currently holds a Zacks Rank of 3 (Hold) [5] Valuation Metrics - DraftKings has a Forward P/E ratio of 31.54, which is higher than the industry average of 19.85, suggesting it is trading at a premium [6] - The company has a PEG ratio of 0.6, compared to the Gaming industry's average PEG ratio of 1.6, indicating a favorable growth expectation relative to its valuation [7] Industry Context - The Gaming industry is part of the Consumer Discretionary sector and currently holds a Zacks Industry Rank of 96, placing it in the top 40% of over 250 industries [7] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Core Viewpoint - DraftKings Inc. will implement a 50-cent transaction fee on all mobile and online bets placed in Illinois starting September 1, 2025, in response to recent tax increases on sports wagering by the Illinois state legislature [1][2]. Company Overview - DraftKings Inc. is a digital sports entertainment and gaming company founded in 2012, headquartered in Boston, and operates as the only U.S.-based vertically integrated sports betting operator [3]. - The company offers a range of products including daily fantasy sports, regulated gaming, and digital media, and is operational in 28 states, Washington, D.C., and Ontario, Canada [3]. - DraftKings is committed to responsible gaming and has partnerships with major sports leagues such as the NFL, NHL, PGA TOUR, WNBA, UFC, NBA, and MLB [3]. Industry Context - The Illinois state legislature has more than tripled the tax rate on sports wagering over the past two years, raising concerns about the impact on the legal, regulated industry and potentially fueling the illegal gaming market [2]. - DraftKings emphasizes the importance of collaborative policymaking to ensure the long-term sustainability of the sports betting industry in Illinois [2].

Core Insights - FanDuel is implementing a 50-cent surcharge on all wagers in Illinois to offset the impact of new state taxes, which are particularly burdensome for leading sportsbooks [1][3] - DraftKings is expected to follow FanDuel's lead in response to the new tax structure [2] - The new tax structure includes a progressive tax rate that can reach up to 40% for the most successful sportsbooks, significantly higher than the previous 15% rate [3][4] Company Actions - FanDuel's new surcharge is projected to generate an additional $86 million in revenue for 2026, representing about 2% of its EBITDA [3] - DraftKings anticipates a revenue increase of $79 million from the surcharge, which would account for approximately 5.4% of its projected EBITDA for the same year [3] - Flutter has stated that if the state reverses the tax decision, FanDuel will eliminate the surcharge immediately [2] Industry Context - The Illinois tax is part of a broader trend, with other states like New Jersey, Maryland, Massachusetts, Michigan, and Pennsylvania considering similar tax increases [6] - Flutter's CEO expressed concerns that the new tax structure disproportionately affects lower-wagering customers and could drive gamblers to unregulated operators [5][6] - The CEO emphasized the need for an optimal gaming tax rate to enhance customer experience, market growth, and state revenue over time [5][7]

Core Insights - The article highlights three companies that have been undervalued by the market but have the potential for significant returns in the future due to their growth prospects in their respective industries. Group 1: Marvell Technology - Marvell Technology is a chip designer benefiting from the growth in artificial intelligence (AI) spending, particularly through its custom AI accelerators and networking chips [5][6]. - The company has secured deals with major hyperscalers like Amazon and Microsoft for next-generation AI accelerators, despite concerns about competition from other chip designers [7][10]. - Marvell's stock is currently trading at around $65 per share, with a forward P/E ratio of 23, indicating strong growth potential and less downside risk compared to previous months [10]. Group 2: Block - Block, the parent company of Cash App and Square, has faced recent challenges due to a shortfall in Cash App's gross profit growth, but this may present a buying opportunity for growth investors [11]. - Cash App is focusing on increasing revenue per user through new services like Cash App Borrow, which aims to enhance user engagement and address spending slowdowns [12][15]. - Block's current share price is around $63, with a P/E ratio of 16.5 based on 2026 earnings estimates, suggesting a strong long-term outlook despite short-term economic uncertainties [15]. Group 3: DraftKings - DraftKings is a leading sports betting company that has leveraged its brand strength in Daily Fantasy Sports to expand into sports betting, attracting approximately 400,000 new monthly unique payers [16][17]. - The company benefits from valuable user data, which enhances its ability to offer personalized promotions and expand into new betting types [18]. - DraftKings' stock is trading at $34 per share, with an enterprise value-to-forward-EBITDA ratio of about 21, and management projects an average EBITDA growth of 35% from 2026 to 2028, indicating strong growth potential [20].

Core Insights - SailGP is partnering with gaming companies DraftKings and Bet365 to allow fans to place bets on races, starting with the Mubadala New York Sail Grand Prix on June 7 and 8, 2024, aiming to enhance fan engagement and attract new audiences [1][2] Group 1: Business Strategy and Revenue Generation - The introduction of betting is part of a broader strategy to increase engagement and attract new fans to SailGP, which was co-founded by Larry Ellison and Russell Coutts in 2018 [2] - SailGP is already generating revenue through ticket sales, sponsorship, and media rights, with significant viewership growth noted [4][9] - The league has seen record attendance and viewership, with the 2025 ITM New Zealand Sail Grand Prix attracting 25,000 fans and the 2025 KPMG Australia Sail Grand Prix reaching 21.1 million viewers globally [5][6] Group 2: Audience Engagement and Demographics - SailGP is drawing a younger and more diverse audience, with 49% of its YouTube subscribers aged 18 to 34, compared to about 25% for other sailing leagues [6] - The league captures 270,000 data points per second during live races to provide real-time odds to bookmakers, enhancing the betting experience [7] Group 3: Team Ownership and Investment - SailGP teams are being acquired at increasing valuations, with the U.S. team sold for $35 million, a significant increase from previous acquisition ranges of $5 million to $10 million [10] - The recent acquisition of the Red Bull Italy SailGP Team by a consortium, including actress Anne Hathaway, indicates a trend of diverse investors in the league, with teams now being valued at over $50 million [11][12] - Currently, 10 of the 12 teams are independently owned, with future teams expected to follow this model [12]

Core Viewpoint - DraftKings has lowered its revenue guidance for 2025 and missed first-quarter revenue estimates, but the company still shows potential for growth despite recent challenges [4][5][10]. Group 1: Financial Performance - DraftKings reported revenue of just over $1.4 billion for the first quarter, reflecting a growth rate of 20%, which was slightly below the nearly 22% growth anticipated by analysts [4]. - The company has lowered its revenue guidance for 2025 to approximately $6.3 billion, a decrease of $150 million from previous estimates [5]. - Monthly unique payers (MUPs) have increased significantly from about 900,000 at the end of 2020 to 4.3 million in the most recent quarter, indicating strong user growth [2][13]. Group 2: Market Reactions and Analyst Outlook - Despite the lowered guidance, DraftKings' stock rose over 2% after the earnings release, suggesting that investor sentiment remains relatively stable [11]. - The average drop in price targets among analysts was less than 1%, with new price targets averaging over $55 per share, indicating a potential upside of 55% compared to the closing price on May 21 [12]. - Analysts maintain a Moderate Buy rating for DraftKings, reflecting confidence in the company's long-term prospects despite recent setbacks [15]. Group 3: Industry Context and Future Potential - The March Madness betting outcomes negatively impacted DraftKings, as higher-seeded teams won 82% of the time, leading to significant losses for the company [10]. - The company expects its adjusted gross margin to increase by 300 basis points in 2025 compared to 2024, indicating potential for improved profitability [13]. - DraftKings currently operates online sports betting in about half of the U.S. states, presenting substantial opportunities for future expansion [14].