The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how casino operator stocks fared in Q3, starting with Boyd Gaming (NYSE:BYD).
Casino operators enjoy limited competition because gambling is a highly regulated industry. These companies can also enjoy healthy margins and profits. Have you ever heard the phrase ‘the house always wins’? Regulation cuts both ways, however, and casinos may face stroke-of-the-pen risk that suddenly limits what they can or can't do and where they can do it. Furthermore, digitization is changing the game, pun intended. Whether it’s online poker or sports betting on your smartphone, innovation is forcing these players to adapt to changing consumer preferences, such as being able to wager anywhere on demand.
The 9 casino operator stocks we track reported a slower Q3. As a group, revenues beat analysts’ consensus estimates by 1.5%.
In light of this news, share prices of the companies have held steady as they are up 3.8% on average since the latest earnings results.
Best Q3: Boyd Gaming (NYSE:BYD)
Run by the Boyd family, Boyd Gaming (NYSE:BYD) is a diversified operator of gaming entertainment properties across the United States, offering casino games, hotel accommodations, and dining.
Boyd Gaming reported revenues of $1.00 billion, up 4.5% year on year. This print exceeded analysts’ expectations by 15.7%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ revenue estimates but a significant miss of analysts’ adjusted operating income estimates.
Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: "During the third quarter, our Company continued to achieve revenue and Adjusted EBITDAR growth after adjusting for our recent FanDuel transaction. These results were driven by year-over-year growth in play from our core customers, improving trends in play from our retail customers, our efficient operations, and our ongoing capital investment program. As a result, we saw healthy growth in gaming revenues across all three property operating segments during the quarter. At the same time, we continued our balanced approach to capital allocation, returning $175 million to shareholders during the quarter while maintaining the strongest balance sheet in our Company's history. In all, we are encouraged by the strength of our business and remain well-positioned to continue creating long-term value for our shareholders."
Boyd Gaming pulled off the biggest analyst estimates beat of the whole group. The stock is up 1.1% since reporting and currently trades at $85.86.
Is now the time to buy Boyd Gaming? Access our full analysis of the earnings results here, it’s free for active Edge members.
Red Rock Resorts (NASDAQ:RRR)
Founded in 1976, Red Rock Resorts (NASDAQ:RRR) operates a range of casino resorts and entertainment properties, primarily in the Las Vegas metropolitan area.
Red Rock Resorts reported revenues of $475.6 million, up 1.6% year on year, falling short of analysts’ expectations by 0.8%. The business performed better than its peers, but it was unfortunately a mixed quarter with a beat of analysts’ EPS estimates but a miss of analysts’ Hotel revenue estimates.
The market seems happy with the results as the stock is up 6.4% since reporting. It currently trades at $63.03.
Is now the time to buy Red Rock Resorts? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: MGM Resorts (NYSE:MGM)
Operating several properties on the Las Vegas Strip, MGM Resorts (NYSE:MGM) is a global hospitality and entertainment company known for its resorts and casinos.
MGM Resorts reported revenues of $4.25 billion, up 1.6% year on year, in line with analysts’ expectations. It was a disappointing quarter as it posted a miss of analysts’ Hotel revenue estimates and a significant miss of analysts’ adjusted operating income estimates.
Interestingly, the stock is up 18.1% since the results and currently trades at $36.57.
Read our full analysis of MGM Resorts’s results here.
Monarch (NASDAQ:MCRI)
Established in 1993, Monarch (NASDAQ:MCRI) operates luxury casinos and resorts, offering high-end gaming, dining, and hospitality experiences.
Monarch reported revenues of $142.8 million, up 3.6% year on year. This number came in 1.7% below analysts' expectations. Taking a step back, it was a mixed quarter as it also recorded a beat of analysts’ EPS estimates but a miss of analysts’ Dining revenue estimates.
Monarch had the weakest performance against analyst estimates among its peers. The stock is flat since reporting and currently trades at $96.48.
Read our full, actionable report on Monarch here, it’s free for active Edge members.
Caesars Entertainment (NASDAQ:CZR)
Formerly Eldorado Resorts, Caesars Entertainment (NASDAQ:CZR) is a global gaming and hospitality company operating numerous casinos, hotels, and resort properties.
Caesars Entertainment reported revenues of $2.87 billion, flat year on year. This print lagged analysts' expectations by 0.9%. Overall, it was a softer quarter as it also produced a significant miss of analysts’ EPS estimates and a miss of analysts’ EBITDA estimates.
The stock is up 5.5% since reporting and currently trades at $23.30.
Read our full, actionable report on Caesars Entertainment here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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