With the business potentially at an important milestone, we thought we'd take a closer look at DraftKings Inc.'s (NASDAQ:DKNG) future prospects. DraftKings Inc. operates as a digital sports entertainment and gaming company in the United States and internationally. The US$18b market-cap company posted a loss in its most recent financial year of US$802m and a latest trailing-twelve-month loss of US$406m shrinking the gap between loss and breakeven. The most pressing concern for investors is DraftKings' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts' expectations for the company.

Consensus from 34 of the American Hospitality analysts is that DraftKings is on the verge of breakeven. They expect the company to post a final loss in 2024, before turning a profit of US$369m in 2025. So, the company is predicted 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 62% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving DraftKings' growth isn't the focus of this broad overview, but, bear in mind that typically 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 relatively high level of debt. Generally, the rule of thumb is debt shouldn't exceed 40% of your equity, which in DraftKings' case is 97%. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on DraftKings, so if you are interested in understanding the company at a deeper level, take a look at DraftKings' company page on Simply Wall St. We've also put together 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.