Draftkings Stock Beneish M Score

DKNG Stock  USD 45.35  3.33  6.84%   
This module uses fundamental data of DraftKings to approximate the value of its Beneish M Score. DraftKings M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Check out DraftKings Piotroski F Score and DraftKings Altman Z Score analysis.
For more detail on how to invest in DraftKings Stock please use our How to Invest in DraftKings guide.
  
At this time, DraftKings' Total Debt To Capitalization is most likely to increase slightly in the upcoming years. The DraftKings' current Debt Equity Ratio is estimated to increase to 1.58, while Short and Long Term Debt is projected to decrease to roughly 5.8 M. At this time, DraftKings' Inventory Turnover is most likely to increase slightly in the upcoming years. The DraftKings' current Ebt Per Ebit is estimated to increase to 1.10, while Price Earnings Ratio is projected to decrease to (21.35).
At this time, it appears that DraftKings is an unlikely manipulator. The earnings manipulation may begin if DraftKings' top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by DraftKings executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of DraftKings' earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-3.46
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables

1.0

Focus
Asset Quality

0.99

Focus
Expense Coverage

0.72

Focus
Gross Margin Strengs

1.63

Focus
Accruals Factor

0.72

Focus
Depreciation Resistance

1.0

Focus
Net Sales Growth

1.05

Focus
Financial Leverage Condition

1.4

Focus

DraftKings Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if DraftKings' auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Net Receivables366.8 M349.3 M
Sufficiently Up
Slightly volatile
Total Revenue3.8 B3.7 B
Sufficiently Up
Slightly volatile
Total AssetsB3.9 B
Way Down
Slightly volatile
Total Current Assets1.5 B2.1 B
Way Down
Slightly volatile
Non Current Assets Total1.2 B1.9 B
Way Down
Slightly volatile
Property Plant Equipment152.2 M145 M
Sufficiently Up
Slightly volatile
Depreciation And Amortization212 M201.9 M
Sufficiently Up
Slightly volatile
Selling General Administrative456.2 M606.6 M
Way Down
Slightly volatile
Total Current Liabilities1.6 B1.5 B
Sufficiently Up
Slightly volatile
Non Current Liabilities Total980.4 M1.6 B
Way Down
Slightly volatile
Short Term Debt9.5 M11.5 M
Significantly Down
Slightly volatile
Long Term Debt1.1 B1.3 B
Fairly Down
Slightly volatile
Short Term Investments2.5 M2.7 M
Notably Down
Slightly volatile
Gross Profit Margin0.610.3746
Way Up
Slightly volatile

DraftKings Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between DraftKings' different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards DraftKings in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find DraftKings' degree of accounting gimmicks and manipulations.

About DraftKings Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Depreciation And Amortization

212.02 Million

At this time, DraftKings' Depreciation And Amortization is most likely to increase significantly in the upcoming years.

DraftKings Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as DraftKings. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201920202021202220232024 (projected)
Net Receivables19.8M74.8M97.8M211.2M349.3M366.8M
Total Revenue323.4M614.5M1.3B2.2B3.7B3.8B
Total Assets330.7M3.4B4.1B4.0B3.9B3.0B
Total Current Assets261.1M2.2B2.8B2.1B2.1B1.5B
Net Debt(1.4M)(1.7B)(834.3M)15.5M63.9M67.1M
Short Term Debt6.8M12.8M12.8M4.3M11.5M9.5M
Operating Income(146.5M)(843.3M)(1.6B)(1.5B)(751.7M)(789.2M)
Gross Profit Margin0.680.440.390.340.370.61

About DraftKings Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze DraftKings's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of DraftKings using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of DraftKings based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
DraftKings Inc. operates a digital sports entertainment and gaming company. DraftKings Inc. was founded in 2011 and is headquartered in Boston, Massachusetts. Draftkings operates under Gambling classification in the United States and is traded on NASDAQ Exchange. It employs 3400 people.

Pair Trading with DraftKings

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if DraftKings position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in DraftKings will appreciate offsetting losses from the drop in the long position's value.

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The ability to find closely correlated positions to DraftKings could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace DraftKings when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back DraftKings - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling DraftKings to buy it.
The correlation of DraftKings is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as DraftKings moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if DraftKings moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for DraftKings can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching
When determining whether DraftKings is a strong investment it is important to analyze DraftKings' competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact DraftKings' future performance. For an informed investment choice regarding DraftKings Stock, refer to the following important reports:
Check out DraftKings Piotroski F Score and DraftKings Altman Z Score analysis.
For more detail on how to invest in DraftKings Stock please use our How to Invest in DraftKings guide.
You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.

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When running DraftKings' price analysis, check to measure DraftKings' market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy DraftKings is operating at the current time. Most of DraftKings' value examination focuses on studying past and present price action to predict the probability of DraftKings' future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move DraftKings' price. Additionally, you may evaluate how the addition of DraftKings to your portfolios can decrease your overall portfolio volatility.
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Is DraftKings' industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of DraftKings. If investors know DraftKings will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about DraftKings listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Earnings Share
(1.73)
Revenue Per Share
7.923
Quarterly Revenue Growth
0.439
Return On Assets
(0.12)
Return On Equity
(0.74)
The market value of DraftKings is measured differently than its book value, which is the value of DraftKings that is recorded on the company's balance sheet. Investors also form their own opinion of DraftKings' value that differs from its market value or its book value, called intrinsic value, which is DraftKings' true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because DraftKings' market value can be influenced by many factors that don't directly affect DraftKings' underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between DraftKings' value and its price as these two are different measures arrived at by different means. Investors typically determine if DraftKings is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, DraftKings' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.