We came across a bullish thesis on DraftKings Inc. on Cundill Deep ValueCundill Deep Value’s Substack by FRAGMENTS. In this article, we will summarize the bulls’ thesis on DKNG. DraftKings Inc.’s share was trading at $27.22 as of February 9th. DKNG’s forward P/E was 17.51 respectively according to Yahoo Finance.
REDPIXEL.PL/Shutterstock.com
DraftKings Inc. operates as a digital sports entertainment and gaming company in the United States and internationally. DKNG can be best understood not as a traditional sports betting company, but as a digitized casino distribution platform that has migrated a long-standing, durable human behavior onto the smartphone. For decades, casinos generated resilient cash flows not because of physical locations, but because demand for fast-feedback, chance-based activity is structurally persistent. Sports betting did not create new demand; it removed friction.
DraftKings sits at the center of this shift, using sports as the most scalable attention channel in the U.S. to acquire and retain customers within a tightly engineered behavioral loop that prioritizes engagement, repeat activity, and habit formation. Events like the Super Bowl function less as demand drivers and more as peak distribution moments, where operators effectively purchase large user cohorts through promotions, marketing, and short-term margin trade-offs. The company’s own disclosures reinforce this framing, emphasizing engagement, efficient acquisition, and structural hold while acknowledging that short-term outcomes can introduce material revenue volatility.
Crucially, DraftKings’ long-term durability is supported by its mobile casino offerings, which provide higher-frequency, more predictable revenue streams that stabilize the inherently seasonal and outcome-sensitive sportsbook business. As sports betting normalizes across the U.S., DraftKings benefits from legalized distribution, cultural adoption, and product design optimized for retention, positioning it as a scalable behavioral business rather than a cyclical sports play.
While increased scrutiny is inevitable as externalities surface, the underlying model mirrors casino economics that have endured for decades. In this context, DraftKings represents a structurally durable platform whose value lies in distribution efficiency and behavioral persistence, not single-event outcomes, offering a compelling long-term investment narrative as the casino continues its transition into the phone.
Previously, we covered a bullish thesis on DraftKings Inc. (DKNG) by Daan Rijnberk in February 2025, which highlighted the company’s rapid revenue growth, expanding EBITDA margins, disciplined expense management, legalization tailwinds, and strong long-term profitability guidance. DKNG’s stock price has depreciated by approximately 40.26% since our coverage. as strong competition by prediction platforms like “Kalshi” and “Polymarket” chipped at its market share. FRAGMENTS shares a similar thesis but emphasizes on DraftKings as a digitized casino distribution platform anchored in behavioral durability and structural normalization.
DraftKings Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 68 hedge fund portfolios held DKNG at the end of the third quarter which was 66 in the previous quarter. While we acknowledge the risk and potential of DKNG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DKNG and that has 10,000% upside potential, check out our report about this cheapest AI stock.
READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW
Disclosure: None. Follow Insider Monkey on Google News.
