Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Everi (NYSE:EVRI) and the best and worst performers in the gaming solutions industry.
Gaming solution companies operate in a dynamic and evolving market, and the digital transformation of the gaming industry presents significant opportunities for innovation and growth, whether it be immersive slot machine terminals or mobile sports betting. However, the gaming solution industry is not without its challenges. Regulatory compliance is a crucial consideration as companies must navigate a complex and often fragmented regulatory landscape across different jurisdictions. Changes in regulations can impact product offerings, operational practices, and market access, requiring companies to maintain flexibility and adaptability in their business strategies. Additionally, the competitive nature of the industry necessitates continuous investment in research and development to stay ahead of competitors and meet evolving consumer demands.
The 8 gaming solutions stocks we track reported a mixed Q1. As a group, revenues beat analysts’ consensus estimates by 2.1%.
Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
Thankfully, gaming solutions stocks have been resilient with share prices up 9.4% on average since the latest earnings results.
Everi (NYSE:EVRI)
Formed between the 2015 merger of Global Cash Access and Multimedia Games, Everi (NYSE:EVRI) is a producer of games and financial infrastructure for the casino and hospitality industries.
Everi reported revenues of $189.3 million, down 5.5% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company. Its Gaming revenue missed as the launch of its new gaming cabinet progressed slower than anticipated, contributing to its worse-than-expected EPS and operating margin.
Randy Taylor, Chief Executive Officer of Everi, said, "We are making progress on the steps necessary to complete our proposed merger with IGT's Global Gaming and PlayDigital businesses later this year or in early 2025. We are excited about the significant growth opportunities we believe this combination will unlock. This transaction will bring together a comprehensive and complementary product set focused on our customers and their diverse needs which we believe will deliver substantial long-term value to our shareholders.
Everi Total Revenue
Interestingly, the stock is up 62.4% since reporting and currently trades at $13.14.
Specializing in online casino gaming and sports betting, Rush Street Interactive (NYSE:RSI) is an operator of digital gaming platforms.
Rush Street Interactive reported revenues of $220.4 million, up 33.5% year on year, outperforming analysts’ expectations by 9.4%. The business had an incredible quarter with an impressive beat of analysts’ earnings and operating margin estimates.
Rush Street Interactive Total Revenue
Rush Street Interactive pulled off the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The market seems content with the results as the stock is up 4.9% since reporting. It currently trades at $10.48.
Founded by a team of former gaming industry executives, PlayStudios (NASDAQ:MYPS) offers free-to-play digital casino games.
PlayStudios reported revenues of $72.59 million, down 6.7% year on year, falling short of analysts’ expectations by 2.6%. It was a softer quarter as it posted full-year revenue guidance missing analysts’ expectations and a miss of analysts’ daily active users estimates.
PlayStudios delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. The company reported 13.6 million monthly active users, down 2% year on year. As expected, the stock is down 21.1% since the results and currently trades at $1.54.
Established in Illinois, Accel Entertainment (NYSE:ACEL) is a provider of electronic gaming machines and interactive amusement terminals to bars and entertainment venues.
Accel Entertainment reported revenues of $309.4 million, up 5.7% year on year. This print beat analysts’ expectations by 2.7%. More broadly, it was a satisfactory quarter as it also logged a solid beat of analysts’ earnings estimates but a miss of analysts’ operating margin estimates.
The stock is up 3.9% since reporting and currently trades at $11.51.
Getting its start in daily fantasy sports, DraftKings (NASDAQ:DKNG) is a digital sports entertainment and gaming company.
DraftKings reported revenues of $1.10 billion, up 26.2% year on year. This print was in line with analysts’ expectations. Overall, it was a very strong quarter as it also recorded an impressive beat of analysts’ operating margin estimates and full-year revenue guidance exceeding analysts’ expectations.
The stock is up 5.4% since reporting and currently trades at $37.43.
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