In This Article:
Casino, tavern, and slot machine operator Golden Entertainment (NASDAQ:GDEN) fell short of the market’s revenue expectations in Q4 CY2024, with sales falling 28.8% year on year to $164.2 million. Its GAAP profit of $0.10 per share was 50.3% below analysts’ consensus estimates.
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Golden Entertainment (GDEN) Q4 CY2024 Highlights:
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Revenue: $164.2 million vs analyst estimates of $168.3 million (28.8% year-on-year decline, 2.4% miss)
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EPS (GAAP): $0.10 vs analyst expectations of $0.20 (50.3% miss)
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Adjusted EBITDA: $39.18 million vs analyst estimates of $38.83 million (23.9% margin, 0.9% beat)
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Operating Margin: 7.1%, up from 3.1% in the same quarter last year
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Market Capitalization: $861.5 million
Blake Sartini, Chairman and Chief Executive Officer of Golden, commented, “Our fourth quarter performance improved sequentially over the third quarter and we anticipate business conditions will continue to improve in 2025. For 2025, we remain focused on investing in our own assets, returning capital to shareholders and pursuing potential strategic opportunities.”
Company Overview
Founded in 2001, Golden Entertainment (NASDAQ:GDEN) is a gaming company operating casinos, taverns, and distributed gaming platforms.
Casino Operator
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.
Sales Growth
A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Golden Entertainment struggled to consistently generate demand over the last five years as its sales dropped at a 7.3% annual rate. This wasn’t a great result and is a tough starting point for our analysis.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Golden Entertainment’s recent history shows its demand has stayed suppressed as its revenue has declined by 22.9% annually over the last two years. Note that COVID hurt Golden Entertainment’s business in 2020 and part of 2021, and it bounced back in a big way thereafter.