Looking back on gaming solutions stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Rush Street Interactive (NYSE:RSI) and its peers.
Gaming solution companies operate in a dynamic and evolving market, and the digital transformation of the gaming industry presents significant opportunities for innovation and growth, whether it be immersive slot machine terminals or mobile sports betting. However, the gaming solution industry is not without its challenges. Regulatory compliance is a crucial consideration as companies must navigate a complex and often fragmented regulatory landscape across different jurisdictions. Changes in regulations can impact product offerings, operational practices, and market access, requiring companies to maintain flexibility and adaptability in their business strategies. Additionally, the competitive nature of the industry necessitates continuous investment in research and development to stay ahead of competitors and meet evolving consumer demands.
The 7 gaming solutions stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 2.4%.
Stocks--especially those trading at higher multiples--had a strong end of 2023, but this year has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts. Thankfully, gaming solutions stocks have been resilient with share prices up 6.5% on average since the latest earnings results.
Best Q2: Rush Street Interactive (NYSE:RSI)
Specializing in online casino gaming and sports betting, Rush Street Interactive (NYSE:RSI) is an operator of digital gaming platforms.
Rush Street Interactive reported revenues of $220.4 million, up 33.5% year on year. This print exceeded analysts’ expectations by 9.4%. Overall, it was an incredible quarter for the company with an impressive beat of analysts’ earnings estimates.
Richard Schwartz, Chief Executive Officer of RSI, said, “We are thrilled to announce another quarter of record-breaking revenues and adjusted EBITDA. The first half of the year has seen our revenue grow by 34% coupled with a $46 million improvement in Adjusted EBITDA compared to last year. The improvement in our results is a direct testament to the strategic decisions we have made over recent years, as well as constantly refining and bettering our approach to attracting and retaining players. The efficiency is leading to strong increases in the number and value of our users.”
Rush Street Interactive scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise of the whole group. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $9.98.
Is now the time to buy Rush Street Interactive? Access our full analysis of the earnings results here, it’s free.
DraftKings (NASDAQ:DKNG)
Getting its start in daily fantasy sports, DraftKings (NASDAQ:DKNG) is a digital sports entertainment and gaming company.
DraftKings reported revenues of $1.10 billion, up 26.2% year on year, in line with analysts’ expectations. The business had a very strong quarter with an impressive beat of analysts’ operating margin estimates and full-year revenue guidance exceeding analysts’ expectations.
The market seems happy with the results as the stock is up 9.9% since reporting. It currently trades at $39.
Is now the time to buy DraftKings? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: PlayStudios (NASDAQ:MYPS)
Founded by a team of former gaming industry executives, PlayStudios (NASDAQ:MYPS) offers free-to-play digital casino games.
PlayStudios reported revenues of $72.59 million, down 6.7% year on year, falling short of analysts’ expectations by 2.6%. It was a softer quarter as it posted full-year revenue guidance missing analysts’ expectations. In addition, the estimated number of daily active users fell below analysts' estimates.
PlayStudios delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. The company reported 13.6 million monthly active users, down 2% year on year. As expected, the stock is down 13.8% since the results and currently trades at $1.68.
Read our full analysis of PlayStudios’s results here.
Churchill Downs (NASDAQ:CHDN)
Famous for hosting the Kentucky Derby, Churchill Downs (NASDAQ:CHDN) operates a horse racing, online wagering, and gaming entertainment business in the United States.
Churchill Downs reported revenues of $890.7 million, up 15.9% year on year. This print topped analysts’ expectations by 3.7%. Overall, it was a strong quarter as it also put up a decent beat of analysts’ earnings estimates.
The stock is up 2% since reporting and currently trades at $139.97.
Read our full, actionable report on Churchill Downs here, it’s free.
Accel Entertainment (NYSE:ACEL)
Established in Illinois, Accel Entertainment (NYSE:ACEL) is a provider of electronic gaming machines and interactive amusement terminals to bars and entertainment venues.
Accel Entertainment reported revenues of $309.4 million, up 5.7% year on year. This result topped analysts’ expectations by 2.7%. Zooming out, it was an incredible quarter as it also logged a solid beat of analysts’ earnings estimates.
The stock is up 8.1% since reporting and currently trades at $11.98.
Read our full, actionable report on Accel Entertainment here, it’s free.
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