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Why Is Boyd (BYD) Down 15.3% Since Last Earnings Report?

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A month has gone by since the last earnings report for Boyd Gaming (BYD - Free Report) . Shares have lost about 15.3% 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 its most recent earnings report in order to get a better handle on the important drivers.

Boyd Gaming Q1 Earnings & Revenues Meet Estimates

Boyd Gaming reported first-quarter 2019 results, wherein both earnings and revenues came in line with the Zacks Consensus Estimate.

Adjusted earnings of 43 cents per share matched the Zacks Consensus Estimate and increased 10.3% year over year on higher margins.

Revenues totaled $827.3 million, almost in line with the consensus estimate of $828 million. The top line also improved 36.5% on a year-over-year basis. Revenue growth can primarily be attributed to year-over-year gain at the Downtown Las Vegas, and Midwest and South segments.

Notably, the company’s first-quarter results also include revenues worth $213 million, realized from the acquisitions of Ameristar Kansas City, Ameristar St. Charles, Belterra Resort and Belterra Park, Valley Forge Casino Resort and Lattner Entertainment.

Segmental Details

Las Vegas Locals

Revenues at this segment amounted to $222.9 million, up 0.3% year over year. Moreover, the segment’s EBITDAR increased to $74.2 million from $71 million registered in the year-ago quarter. Ongoing marketing and operational refinements as well as continued strength in the regional economy drove the segment’s results.

Downtown Las Vegas

At this segment, revenues rose 4.1% to $63 million. Adjusted EBITDAR increased to $15 million from $13.2 million in the prior-year quarter driven by growth at all three downtown properties. The segment also benefited from the company’s solid Hawaiian customer base.

The Midwest and South Segment

Revenues at this segment improved 67.4% to $541.4 million. Adjusted EBITDAR was $156.5 million, up from $94.2 million in the year-ago period. Notably, the segment reported a fourth straight quarter of same-store Adjusted EBITDAR growth in the quarter under review. Modifications to marketing programs and operational capabilities drove the segment’s revenues and EBITDA. Further, the acquisition of Valley Forge Casino Resort and Lattner Entertainment contributed to the segment’s quarterly performance.

Other Financial Details

As of Mar 31, 2019, Boyd Gaming had cash on hand of $247.7 million. Total debt amounted to $4 billion.

For 2019, Boyd Gaming continues to expect total adjusted EBITDA of $885-$910 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

VGM Scores

Currently, Boyd has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, 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 downward for the stock, and the magnitude of this revision indicates a downward shift. 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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