Since June 2025, Accel Entertainment has been in a holding pattern, posting a small loss of 0.6% while floating around $11.70. The stock also fell short of the S&P 500’s 11.7% gain during that period.
Is now the time to buy Accel Entertainment, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it’s free for active Edge members.
Why Do We Think Accel Entertainment Will Underperform?
We're swiping left on Accel Entertainment for now. Here are three reasons you should be careful with ACEL and a stock we'd rather own.
1. Weak Growth in Video Gaming Terminals Sold Points to Soft Demand
Revenue growth can be broken down into changes in price and volume (for companies like Accel Entertainment, our preferred volume metric is video gaming terminals sold). While both are important, the latter is the most critical to analyze because prices have a ceiling.
Accel Entertainment’s video gaming terminals sold came in at 27,714 in the latest quarter, and over the last two years, averaged 6.1% year-on-year growth. This performance was underwhelming and suggests it might have to lower prices or invest in product improvements to accelerate growth, factors that can hinder near-term profitability. 
2. Mediocre Free Cash Flow Margin Limits Reinvestment Potential
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
Accel Entertainment has shown poor cash profitability over the last two years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 4.8%, lousy for a consumer discretionary business.
3. New Investments Aren’t Moving the Needle
A company’s ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity).
We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Unfortunately, Accel Entertainment’s ROIC has stayed the same over the last few years. If the company wants to become an investable business, it must improve its returns by generating more profitable growth.
Final Judgment
We see the value of companies helping consumers, but in the case of Accel Entertainment, we’re out. With its shares underperforming the market lately, the stock trades at 13.3× forward P/E (or $11.70 per share). This valuation is reasonable, but the company’s shaky fundamentals present too much downside risk. There are superior stocks to buy right now. We’d recommend looking at our favorite semiconductor picks and shovels play.
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