DraftKings (NASDAQ: DKNG) stock has done well since it began trading on the Nasdaq exchange in April, quadrupling in value to almost $48 a share.

While that's down 25% from its high point of over $64 a stub, Wall Street seems confused over which way it will go. A Needham analyst has put a $70 price target on the stock, but J.P. Morgan says its current price is a fair value.

Yet Flutter Entertainment (OTC: PDYPF) just raised its ownership stake in FanDuel to 95%, which gave it an implied enterprise value of $11.2 billion, a significant discount to DraftKings' $17.5 billion valuation, even though FanDuel is the larger of the two sportsbooks with a preeminent position in New Jersey, the country's largest market for sports betting.

If that 36% discount were priced into DraftKing's stock, that would cause it to fall to around $31 a share. Should investors worry its shares are about to crater?

Image source: Getty Images.

A good bet

I don't think so. While putting a price tag on DraftKings is actually much more complicated than you might think, it's also not so easy to peg FanDuel's real value because of Flutter's ownership, which also includes Paddy Power, BetFair, and The Stars Group, owner of the world's leading poker platform, PokerStars.

Moreover, the sports betting market is growing, with three states this year legalizing it within their borders. DraftKings estimates the total addressable market could be as high as $40 billion, which suggests the expanding pie could give all players a sizable slice.

While competition is intense and growing, DraftKings enjoys a large and growing position in the space, and though it's still producing losses, it's also seeing large revenue gains. As more states come online, the sportsbook will be a growth stock to watch, not to fear.

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Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.