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Boyd (BYD) Down 7.9% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Boyd Gaming (BYD - Free Report) . Shares have lost about 7.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Boyd due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Boyd Gaming Q3 Earnings Beat Estimates, Increase Y/Y

Boyd Gaming reported solid third-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate as well as rising year over year. Both the metrics surpassed their respective consensus mark for the sixth straight quarter.

Q3 Earnings and Revenues

In the quarter under review, adjusted earnings per share were $1.30, outpacing the Zacks Consensus Estimate of $1.21 by 7.4%. The metric increased significantly from 38 cents reported in the prior-year quarter.

Quarterly revenues of $843.1 million beat the consensus mark of $837 million by 0.7%. The top line increased 29.3% on a year-over-year basis.

Total adjusted EBITDAR during the reported quarter amounted to $360.6 million compared with $259.9 million in the prior-year quarter. Property adjusted EBITDAR margins came in at 42.8%, up from 39.8% reported in the year-ago quarter.

Segmental Detail

Las Vegas Locals

During the third of 2021, revenues in the segment amounted to $231.3 million, up 35.2% year over year. The segment’s adjusted EBITDAR totaled $125.4 million, up 58.9% from $78.9 million reported in the year-ago quarter. During the quarter under review, adjusted EBITDAR margin rose more than 809 basis points (bps) year over year to 54.2%.

Downtown Las Vegas

During the quarter, revenues in the segment rallied 140.2% from the prior-year quarter’s figure to $42.1 million. Adjusted EBITDAR was $13.2 million against ($1.5) million reported in the year-ago quarter. Adjusted EBITDAR margin during the third quarter came in at 31.4% against (8.6%) reported in the prior-year quarter.

Midwest and South Segment

During the third quarter, revenues in the segment increased 22.9% year over year to $569.7 million. Adjusted EBITDAR amounted to $222.1 million, up 21.7% from $182.5 million reported in the year-ago quarter. Adjusted EBITDAR margin during the quarter came in at 39% compared with 39.4% reported in the prior-year quarter.

Operating Highlights

During third-quarter 2021, the company’s total operating costs and expenses came in at $619.9 million compared with $525.2 million reported in the year-ago quarter. During the quarter, selling, distribution and administration expenses came in at $91.2 million compared with $85.9 million reported in the prior-year quarter.

Balance Sheet

As of Sep 30, 2021, the company had cash on hand of $ $570.9 million compared with $334.5 million as of Jun 30, 2021. Total debt during the third quarter amounted to $3.38 billion compared with $3.39 billion in second-quarter 2021.

Backed by the solidarity of its balance sheet, the company authorized a new share repurchase program worth $300 million. The initiative was a testament to the company’s long-term growth prospects and balanced approach in allocating capital to growth investments, deleveraging and returning free cash flow to shareholders. The company stated availability of $61 million under its previous repurchase program.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 11.16% due to these changes.

VGM Scores

At this time, Boyd has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Boyd has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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