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Here's Why You Should Hold Scientific Games in Your Portfolio
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Scientific Games Corp is benefiting from its acquisition strategies and innovative product lines.
With expected long-term earnings per share growth rate of 10% and a market cap of $2.40 billion, it seems to be a stock that investors should keep in their portfolio for now.
Let’s take a look at the factors that have been influencing the company’s performance.
Scientific Games is benefiting from Gaming Systems and Table Products driven by increased system installation in casinos. Additionally, a surge in slot replacement unit sales in North America is a positive for the company. The impressive performance of Bingo Showdown and MONOPOLY has been an additional positive.
Contract wins have been the key driving force for the company. Most recently, the company announced that Washington Lottery will continue availing its offerings like instant games, services and licensed brands. Scientific Games, which designs and produces instant games for Washington Lottery, will continue to provide the service till March 2024. Additionally, the company will introduce a loyalty program and design a new mobile app.
Additionally, acquisitions have also been aiding the top line. The company has completed three buyouts in the year-to-date period. The list includes EsysnetG, Tech Art and NYX Gaming Group. These acquisitions are enabling Scientific Games to broaden its product pipeline in digital gaming and online lottery markets.
However, Scientific Games faces intense competition in most of its operating markets. The presence of a large number of competitors in its core market significantly reduces its ability to demand higher renewal rates, thereby hurting its profitability.
Moreover, Scientific Games is dependent on renewal of long-term contracts. So, the loss of a single contract, either to a competitor, or for any other reason will have a significant impact on revenues.
Nevertheless, the innovative product portfolio along with international expansion is expected to assist Scientific Games improve its financial performance going ahead.
Given the factors in favor of the company, investors should currently retain this Zacks Rank #3 (Hold) stock in their portfolio.
Vishay Electronics, Paycom Software and NetApp have a long term-expected EPS growth rate of 9.2%, 25.5% and 14.1%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Here's Why You Should Hold Scientific Games in Your Portfolio
Scientific Games Corp is benefiting from its acquisition strategies and innovative product lines.
With expected long-term earnings per share growth rate of 10% and a market cap of $2.40 billion, it seems to be a stock that investors should keep in their portfolio for now.
Let’s take a look at the factors that have been influencing the company’s performance.
Scientific Games is benefiting from Gaming Systems and Table Products driven by increased system installation in casinos. Additionally, a surge in slot replacement unit sales in North America is a positive for the company. The impressive performance of Bingo Showdown and MONOPOLY has been an additional positive.
Contract wins have been the key driving force for the company. Most recently, the company announced that Washington Lottery will continue availing its offerings like instant games, services and licensed brands. Scientific Games, which designs and produces instant games for Washington Lottery, will continue to provide the service till March 2024. Additionally, the company will introduce a loyalty program and design a new mobile app.
Additionally, acquisitions have also been aiding the top line. The company has completed three buyouts in the year-to-date period. The list includes EsysnetG, Tech Art and NYX Gaming Group. These acquisitions are enabling Scientific Games to broaden its product pipeline in digital gaming and online lottery markets.
Scientific Games Corp Price
Scientific Games Corp Price | Scientific Games Corp Quote
However, Scientific Games faces intense competition in most of its operating markets. The presence of a large number of competitors in its core market significantly reduces its ability to demand higher renewal rates, thereby hurting its profitability.
Moreover, Scientific Games is dependent on renewal of long-term contracts. So, the loss of a single contract, either to a competitor, or for any other reason will have a significant impact on revenues.
Nevertheless, the innovative product portfolio along with international expansion is expected to assist Scientific Games improve its financial performance going ahead.
Given the factors in favor of the company, investors should currently retain this Zacks Rank #3 (Hold) stock in their portfolio.
Stocks to Consider
Some better-ranked stocks in the broader technology sector include Vishay Intertechnology, Inc. (VSH - Free Report) , Paycom Software, Inc. (PAYC - Free Report) and NetApp, Inc. (NTAP - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Vishay Electronics, Paycom Software and NetApp have a long term-expected EPS growth rate of 9.2%, 25.5% and 14.1%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>