Casino Operator Stocks Q3 Teardown: Monarch (NASDAQ:MCRI) Vs The Rest
Wrapping up Q3 earnings, we look at the numbers and key takeaways for the casino operator stocks, including Monarch (NASDAQ:MCRI) and its peers.
Casino operators enjoy limited competition because gambling is a highly regulated industry. These companies can also enjoy healthy margins and profits. Have you ever heard the phrase ‘the house always wins’? Regulation cuts both ways, however, and casinos may face stroke-of-the-pen risk that suddenly limits what they can or can't do and where they can do it. Furthermore, digitization is changing the game, pun intended. Whether it’s online poker or sports betting on your smartphone, innovation is forcing these players to adapt to changing consumer preferences, such as being able to wager anywhere on demand.
The 9 casino operator stocks we track reported a slower Q3. As a group, revenues were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6.3% since the latest earnings results.
Monarch (NASDAQ:MCRI)
Established in 1993, Monarch (NASDAQ:MCRI) operates luxury casinos and resorts, offering high-end gaming, dining, and hospitality experiences.
Monarch reported revenues of $137.9 million, up 3.7% year on year. This print exceeded analysts’ expectations by 2.9%. Overall, it was a strong quarter for the company with a decent beat of analysts’ EPS and EBITDA estimates.
CEO Comment John Farahi, Co-Chairman and Chief Executive Officer of Monarch, commented: "Our 2024 third quarter results were strong, reflecting the strength and player appeal of our properties, amenities and service level. Third quarter net revenue and adjusted EBITDA were $137.9 million and $50.6 million, respectively, resulting in an EBITDA margin of 36.7%."
Monarch Total Revenue
Interestingly, the stock is up 11.3% since reporting and currently trades at $81.99.
Run by the Boyd family, Boyd Gaming (NYSE:BYD) is a diversified operator of gaming entertainment properties across the United States, offering casino games, hotel accommodations, and dining.
Boyd Gaming reported revenues of $961.2 million, up 6.4% year on year, outperforming analysts’ expectations by 4.8%. The business had a strong quarter with a decent beat of analysts’ EBITDA estimates.
Boyd Gaming Total Revenue
Boyd Gaming achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 11.7% since reporting. It currently trades at $71.83.
Founded by the former Mirage Resorts CEO, Wynn Resorts (NASDAQ:WYNN) is a global developer and operator of high-end hotels and casinos, known for its luxurious properties and premium guest services.
Wynn Resorts reported revenues of $1.69 billion, up 1.3% year on year, falling short of analysts’ expectations by 2%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income and EPS estimates.
As expected, the stock is down 14% since the results and currently trades at $82.24.
Founded in 2001, Golden Entertainment (NASDAQ:GDEN) is a gaming company operating casinos, taverns, and distributed gaming platforms.
Golden Entertainment reported revenues of $161.2 million, down 37.4% year on year. This number lagged analysts' expectations by 1.1%. Aside from that, it was a mixed quarter as it also produced a solid beat of analysts’ EPS estimates but a significant miss of analysts’ adjusted operating income estimates.
Golden Entertainment had the slowest revenue growth among its peers. The stock is up 2% since reporting and currently trades at $31.42.
Operating several properties on the Las Vegas Strip, MGM Resorts (NYSE:MGM) is a global hospitality and entertainment company known for its resorts and casinos.
MGM Resorts reported revenues of $4.18 billion, up 5.3% year on year. This print missed analysts’ expectations by 0.5%. It was a softer quarter as it also recorded a significant miss of analysts’ EBITDA and EPS estimates.
The stock is down 21.6% since reporting and currently trades at $32.45.
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
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