Yahoo Finance Here's Why You Should Retain Boyd Gaming (BYD) Stock Now
Boyd Gaming Corporation BYD is likely to benefit from Las Vegas operations, expansion initiatives and igaming prospects. Also, focus on strategic acquisitions bodes well. However, inflationary pressures are a concern.
Let’s delve deeper.
Factors Driving Growth
Boyd Gaming considers the local market in Las Vegas as a major driver for its portfolios. With restaurants and bars open, frequent visitations by locals are likely to spurt the company’s growth. In the first quarter, the company witnessed increased visitation to Las Vegas thanks to consistent growth in the convention business and the travel resumption of Hawaiian customers (owing to the upliftment of COVID-related restrictions). During the quarter, the company reported positive customer trends concerning guest counts, frequency and spending. Given the rising visitation, convention business and employment growth, the company is optimistic and anticipates the momentum to continue for some time.
Boyd Gaming's focus on organic and inorganic expansion initiatives bodes well. The company actively engages in acquisition strategies and noteworthy collaborations to enhance its product portfolio and market reach. Boyd Gaming continues to invest in property upgrades and renovations across its portfolio to drive long-term growth.
During the first quarter, the company reported solid performance of Sky River Casino and stated plans for significant expansion, including additional casino space, a hotel tower and meeting facilities. BYD also announced renovation updates for rooms at Gold Coast, Ameristar St. Charles and Blue Chip. It emphasized projects at the Orleans IP and Valley Forge. The company is optimistic and anticipates it to be a driving factor in the coming periods.
Boyd Gaming's online and managed businesses continued to deliver strong results. The management is focused on maintaining operating efficiencies and a disciplined marketing approach to drive growth.
During first-quarter 2024, adjusted EBITDAR in the Online segment was $20.5 million, reflecting a sequential growth of 18.5%. For 2024, Boyd Gaming expects this segmental EBITDAR in the range of $60-$65 million. Management projects solid contributions from FanDuel, given its industry-leading position in online sports betting across the country.
The company focuses on the Pala Interactive acquisition to boost its online gaming positioning. Backed by the latter’s technology (featuring a player account management system and iGaming products) and its operational and marketing expertise, the initiative allows the company to fortify its position in the emerging iGaming opportunity.
Concerns
In the past year, the stock has declined 20.1% against the industry’s 6.8% growth. The downside can be attributed to a volatile macro environment and inflationary pressures.
Boyd Gaming has been grappling with higher expenses across gaming, food and beverage, room and other offerings. During first-quarter 2024, selling, general and administrative expenses increased year over year to $108.2 million from $100.3 million. Total operating costs and expenses were $741.1 million, up from $679.1 million reported in the prior year.
The company intends to monitor the economic situation to gauge the impacts of interest rate hikes and inflationary pressures.
Zacks Rank & Key Picks
Boyd Gaming currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
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The Zacks Consensus Estimate for RCL’s 2024 sales and earnings per share (EPS) calls for growth of 16.9% and 64%, respectively, from the year-ago levels.
PlayAGS, Inc. AGS presently sports a Zacks Rank of 1. AGS has a trailing four-quarter earnings surprise of 33.3%, on average. The stock has hiked 103.2% in the past year.
The consensus estimate for AGS’s 2024 sales and EPS suggests growth of 7.7% and 5,200%, respectively, from the year-ago levels.
Adtalem Global Education Inc. ATGE currently sports a Zacks Rank of 1. ATGE has a trailing four-quarter earnings surprise of 18.8%, on average. The stock has surged 97.6% in the past year.
The Zacks Consensus Estimate for ATGE’s fiscal 2025 sales and EPS indicates an increase of 8.3% and 16.4%, respectively, from year-ago levels.
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Boyd Gaming Corporation (BYD) : Free Stock Analysis Report
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