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Here's Why You Should Retain Boyd Gaming (BYD) Stock Now
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Boyd Gaming Corporation (BYD - Free Report) is likely to benefit from Las Vegas operations, FanDuel partnership and the Pala Interactive acquisition. This and the focus on portfolio expansion efforts bode 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 drive growth for the company. Despite an inflationary environment during the third quarter of 2022, the company reported positive customer trends with respect to guest counts, frequency and spending. The segment’s EBITDAR was up nearly 75% from 2019 levels. An increase in Hawaiian visitation and strong contributions at Main Street Station added to the positives. With properties now open and visitation in recovery mode, the company anticipates continuing momentum in the upcoming quarters. This and the emphasis on core customers and streamlining of cost structures are likely to add to the positives.
Since the coronavirus outbreak, Boyd Gaming has been witnessing a solid performance by its interactive gaming platform. Thanks to its strategic partnership with FanDuel, the company is optimistic regarding its future in the iGaming industry. The company is focused on online gaming prospects in Kansas and Ohio. Given the growth opportunities related to the expansion in new markets and digital opportunities in online casino gaming, the company anticipates EBITDAR (from its online operations) to exceed $30 million in 2022.
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. The company will focus on growing Pala's B2B business by acquiring new B2B customers and enhancing the platform's products, features and capabilities, thereby benefiting current and new customers.
Boyd Gaming focuses on strengthening land-based and online operations through capital investments. During the third quarter, the company stated to have made progress with respect to the expansion of the Fremont Hotel and Casino, comprising an expanded casino floor space, FanDuel Sportsbook and quick-serve dining options. Moreover, the company is evaluating opportunities to reinvest in its existing operations from its regional portfolio. To this end, it has started to develop a land-based facility at Treasure Chest. The company intends to complete the expansion project by early 2024. It emphasized enhancing its gaming and non-gaming offerings to boost the guest experience of this property.
In the past three months, shares of Boyd Gaming have gained 14.3% compared with the industry’s 6.2% growth.
Image Source: Zacks Investment Research
Concerns
Boyd Gaming has been grappling with higher expenses across gaming, food and beverage, room, and other offerings. During third-quarter 2022, the company’s total operating costs and expenses came in at $639.8 million compared with $619.9 million reported in the year-ago quarter. During the quarter, selling, distribution and administration expenses came in at $93 million compared with $91.2 million reported in the prior-year quarter. The downside was primarily driven by inflationary pressures related to energy and utility costs.
Although most properties have reopened, potential resurgences or new virus variants might hurt the company in the upcoming periods. Since the pandemic’s severity, duration and impact cannot be ascertained, the possibility of additional business disruptions, lower customer traffic and reduced operations cannot be ruled out.
Hilton Grand Vacations currently has a Zacks Rank #1. HGV has a trailing four-quarter earnings surprise of 3.7%, on average. The stock has declined 26.7% in the past year.
The Zacks Consensus Estimate for HGV’s 2023 sales and earnings per share (EPS) indicates a rise of 4.7% and 24.6%, respectively, from the year-ago period’s levels.
RCI Hospitality currently has a Zacks Rank #2 (Buy). RICK has a trailing four-quarter earnings surprise of 6.1%, on average. The stock has gained 29.3% in the past year.
The Zacks Consensus Estimate for RICK’s 2023 sales and EPS indicates growth of 12.7% and 10.6%, respectively, from the year-ago period’s reported levels.
Hyatt currently has a Zacks Rank #2. H has a trailing four-quarter earnings surprise of 652.3%, on average. The stock has declined 5.6% in the past year.
The Zacks Consensus Estimate for H’s 2023 sales and EPS indicates a surge of 7.4% and 136.6%, respectively, from the year-ago period’s reported levels.
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Here's Why You Should Retain Boyd Gaming (BYD) Stock Now
Boyd Gaming Corporation (BYD - Free Report) is likely to benefit from Las Vegas operations, FanDuel partnership and the Pala Interactive acquisition. This and the focus on portfolio expansion efforts bode 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 drive growth for the company. Despite an inflationary environment during the third quarter of 2022, the company reported positive customer trends with respect to guest counts, frequency and spending. The segment’s EBITDAR was up nearly 75% from 2019 levels. An increase in Hawaiian visitation and strong contributions at Main Street Station added to the positives. With properties now open and visitation in recovery mode, the company anticipates continuing momentum in the upcoming quarters. This and the emphasis on core customers and streamlining of cost structures are likely to add to the positives.
Since the coronavirus outbreak, Boyd Gaming has been witnessing a solid performance by its interactive gaming platform. Thanks to its strategic partnership with FanDuel, the company is optimistic regarding its future in the iGaming industry. The company is focused on online gaming prospects in Kansas and Ohio. Given the growth opportunities related to the expansion in new markets and digital opportunities in online casino gaming, the company anticipates EBITDAR (from its online operations) to exceed $30 million in 2022.
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. The company will focus on growing Pala's B2B business by acquiring new B2B customers and enhancing the platform's products, features and capabilities, thereby benefiting current and new customers.
Boyd Gaming focuses on strengthening land-based and online operations through capital investments. During the third quarter, the company stated to have made progress with respect to the expansion of the Fremont Hotel and Casino, comprising an expanded casino floor space, FanDuel Sportsbook and quick-serve dining options. Moreover, the company is evaluating opportunities to reinvest in its existing operations from its regional portfolio. To this end, it has started to develop a land-based facility at Treasure Chest. The company intends to complete the expansion project by early 2024. It emphasized enhancing its gaming and non-gaming offerings to boost the guest experience of this property.
In the past three months, shares of Boyd Gaming have gained 14.3% compared with the industry’s 6.2% growth.
Image Source: Zacks Investment Research
Concerns
Boyd Gaming has been grappling with higher expenses across gaming, food and beverage, room, and other offerings. During third-quarter 2022, the company’s total operating costs and expenses came in at $639.8 million compared with $619.9 million reported in the year-ago quarter. During the quarter, selling, distribution and administration expenses came in at $93 million compared with $91.2 million reported in the prior-year quarter. The downside was primarily driven by inflationary pressures related to energy and utility costs.
Although most properties have reopened, potential resurgences or new virus variants might hurt the company in the upcoming periods. Since the pandemic’s severity, duration and impact cannot be ascertained, the possibility of additional business disruptions, lower customer traffic and reduced operations cannot be ruled out.
Zacks Rank & Key Picks
Boyd Gaming currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Consumer Discretionary sector are Hilton Grand Vacations Inc. (HGV - Free Report) , RCI Hospitality Holdings, Inc. (RICK - Free Report) and Hyatt Hotels Corporation (H - Free Report) .
Hilton Grand Vacations currently has a Zacks Rank #1. HGV has a trailing four-quarter earnings surprise of 3.7%, on average. The stock has declined 26.7% in the past year.
The Zacks Consensus Estimate for HGV’s 2023 sales and earnings per share (EPS) indicates a rise of 4.7% and 24.6%, respectively, from the year-ago period’s levels.
RCI Hospitality currently has a Zacks Rank #2 (Buy). RICK has a trailing four-quarter earnings surprise of 6.1%, on average. The stock has gained 29.3% in the past year.
The Zacks Consensus Estimate for RICK’s 2023 sales and EPS indicates growth of 12.7% and 10.6%, respectively, from the year-ago period’s reported levels.
Hyatt currently has a Zacks Rank #2. H has a trailing four-quarter earnings surprise of 652.3%, on average. The stock has declined 5.6% in the past year.
The Zacks Consensus Estimate for H’s 2023 sales and EPS indicates a surge of 7.4% and 136.6%, respectively, from the year-ago period’s reported levels.