DraftKings Inc. (NASDAQ:DKNG) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. DraftKings Inc. operates as a digital sports entertainment and gaming company in the United States and internationally. The US$18b market-cap company's loss lessened since it announced a US$802m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$548m, as it approaches breakeven. As path to profitability is the topic on DraftKings' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

DraftKings is bordering on breakeven, according to the 33 American Hospitality analysts. They expect the company to post a final loss in 2024, before turning a profit of US$420m in 2025. The company is therefore projected to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 59% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won't go into details of DraftKings' upcoming projects, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with DraftKings is its debt-to-equity ratio of 151%. Typically, debt shouldn't exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of DraftKings which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at DraftKings, take a look at DraftKings' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:

1. Valuation: What is DraftKings worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether DraftKings is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on DraftKings's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com