3 Gambling Stocks to Buy as Coronavirus Case Counts Plunge

NYSE: BYD | Boyd Gaming Corporation  News, Ratings, and Charts

BYD – Because COVID-19 cases are now declining in the U.S., investors have more reason to feel optimistic about a casino and gambling sector resurgence. With brick-and-mortar casinos reopening gradually now, a huge pent-up demand for gaming and gambling should boost the revenues of companies such as Boyd Gaming (BYD), International Game Technology (IGT), and Red Rock Resorts (RRR). So, we think investing in these stocks now could help one generate solid returns.

After almost 11 months, an argument can now be made that the COVID-19 pandemic is finally in retreat in the United States. According to a CNBC analysis of Johns Hopkins University data, new daily average cases have plunged in 43 states. This is  good news for the country in general and for the gambling industry in particular. As increasing numbers of people begin to feel safe to visit brick-and-mortar casinos, the industry will see revenue growth.

Like most industries, the gaming and gambling industry was hit hard last year. However, because casinos are gradually reopening this year, a huge pent-up demand for gambling should boost the sales of gambling services and related goods significantly. Because people are desperate to escape their homes, hungry for entertainment and fun after a nearly one-year-long lockdown,  gambling and gaming businesses are expected to thrive.

Against this backdrop, gambling stocks  Boyd Gaming Corporation (BYD), International Game Technology PLC (IGT), and Red Rock Resorts, Inc. (RRR) appear to be  promising  plays on the industry’s rebound. We think their efficient operating models should help them generate massive profits in the months to come.

Boyd Gaming Corporation (BYD)

Headquartered in Las Vegas, Nevada, BYD is a multi-jurisdictional gaming company that operates through three segments – Las Vegas Locals, Downtown Las Vegas, and Midwest & South. As of last October, it operated 29 gaming entertainment properties located in Nevada, Illinois, Indiana and other states.

This month, BYD and Aristocrat Technologies launched BYD’s new digital wallet product – BoydPay. This partnership is expected to  help BYD create a unique and seamless payment experience for its customers and drive business growth.

Last year, BYD and FanDuel Group debuted the FanDuel Par-A-Dice Sportsbook in the state of Illinois. BYD expects the FanDuel Par-A-Dice Sportsbook to quickly become Illinois sports bettors’ mobile app of choice as it continues to expand its mobile and retail offerings.

BYD’S other segment’s revenue has increased 35.2% year-over-year to $57.4 million in the fourth quarter ended December 31, 2020. Its net income grew 242.8% from its  year-ago value to $83.29 million, while its EPS increased 247.6% year-over-year to $0.73. The company’s adjusted EBITDAR under the Midwest & South segment rose 1.3% from its  prior-year quarter to $159.46 million.

A consensus EPS estimate of $0.49 for the next quarter, ending June 30, 2021, indicates a 150% improvement year-over-year. Also, BYD beat the Street’s EPS estimates in three of the trailing four quarters. The consensus revenue estimate of $678.5 million for the next quarter represents a 419% increase from the same period last year. The stock has gained 69.4% over the past year.

BYD’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

BYD has a B grade for Growth and Quality. Within the Entertainment – Casinos/Gambling industry, it is ranked #2 of 23 stocks.

In addition to the POWR Ratings grades I’ve just highlighted, you can see the BYD ratings for Stability, Momentum, Value and Sentiment.

International Game Technology PLC (IGT)

Founded in 2014, IGT offers gaming technology products and services worldwide. It  operates through four segments: North America Gaming and Interactive, North America Lottery, International, and Italy. The company also provides online lottery transaction processing systems and sports betting services.

This month IGT announced that it plans to  its  Las Vegas Strip property to a state-of-the-art IGT ADVANTAGE Casino Management System. This move  is designed to  enhance guest experience and patron loyalty. It should  also ensure long-term capacity for future growth.

Also, this month, IGT México Lottery extended its partnership with La Lotería Nacional para la Asistencia Pública, Mexico’s national lottery, to continue delivery of its draw-based and instant tickets system. The partnership is helping IGT provide innovative and reliable services to its customers.

IGT’s global lottery revenue increased 3% year-over-year to $570 million in the third quarter ended September 30, 2020. Its operating income under its  international  lottery segment grew 22% from its year-ago value to $196 million, while its adjusted EBITDA rose 14% year-over-year to $309 million over the period. Its net cash provided by operating activities increased 44.8% from the prior-year quarter to $285.21 million.

A consensus EPS estimate of $0.78 for fiscal 2021 represents  a 1,075% improvement year-over-year. IGT has an impressive earnings surprise history, with the company beating consensus EPS estimates in each of the trailing four quarters. The consensus revenue estimate of $4.05 billion for the current year represents  a 15.4% increase from the same period last year. The stock has gained 28.2% over the past year.

It is no surprise that IGT has an overall rating of B, which equates to Buy in our POWR Ratings system. IGT has a Bgrade  for Growth and Value. In the same industry, the stock is ranked #5.

To see additional POWR Ratings for Stability, Sentiment, Momentum and Quality for IGT, click here.

Red Rock Resorts, Inc. (RRR)

Based in Las Vegas, Nevada, RRR is engaged in casino entertainment and gaming and entertainment businesses in the United States. The company operates through Las Vegas Operations and Native American Management. It owns and operates 10 gaming and entertainment facilities and 10 smaller casinos in the Las Vegas regional market.

Last month, the company issued a notice of partial redemption of the senior notes due 2025. RRR plans to redeem  $250 million  of senior notes with cash on hand.  RRR’s operating revenue under its management fees segment has increased 21% year-over-year to $25.78 million in the fourth quarter ended December 31, 2020. Its net income increased 515.2% from its  year-ago value to $29.71 million, while its EPS rose 500% year-over-year to $0.42. The company’s adjusted EBITDA grew 9.4% from the prior-year quarter to $150.54 million.

A consensus EPS estimate of $0.89 for 2021 represents  a 141.8% improvement year-over-year. RRR has an impressive earnings surprise history, with the company beating consensus EPS estimates in three of the trailing four quarters. The consensus revenue estimate of $1.35 billion for the current year represents  a 14.4% increase from the same period last year. The stock has gained 9.3% over the past year.

RRR’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our POWR Ratings system. RRR has a B grade  for both Growth and Quality. In the same industry, the stock is ranked #7.

In total, we rate RRR on eight different levels. Beyond what we’ve stated above we have also given RRR grades for Momentum, Value, Sentiment, and Stability. Get all the RRR ratings here.

The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

Want More Great Investing Ideas?

“MUST OWN” Growth Stocks for 2021

How to Ride the 2021 Stock Market Bubble

7 Best ETFs for the NEXT Bull Market

5 WINNING Stocks Chart Patterns

 


BYD shares were trading at $59.61 per share on Thursday morning, down $0.81 (-1.34%). Year-to-date, BYD has gained 38.89%, versus a 4.63% rise in the benchmark S&P 500 index during the same period.


About the Author: Imon Ghosh


Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
BYDGet RatingGet RatingGet Rating
IGTGet RatingGet RatingGet Rating
RRRGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

3 Energy Stocks Set to Soar Beyond Expectations

Given the geopolitical tensions, increasing global oil demand, and supply adjustments, the energy sector is poised for robust growth. Therefore, investors might consider investing in energy stocks TechnipFMC (FTI), Weatherford International (WFRD), and ChampionX (CHX), which are poised to exceed expectations. Keep reading…

Has Carnival (CCL) Stock Turned Into a Buy After Earnings Release?

Carnival Corporation (CCL) reported record revenue in its most recent quarter but still faces a negative bottom line. The collapse of Francis Scott Key Bridge brings more uncertainty to its financials. Given these events, what stance should one take with CCL stock? Read more to find out…

3 China Stocks Positioned for Long-Term Growth

Despite facing challenges, the Chinese economy has demonstrated resilience, as evidenced by recent robust industrial output and retail sales data. Given this outlook, it might be an opportune time to own three top-notch China stocks, JD.com, Inc. (JD), China Automotive Systems (CAAS), and Youdao, Inc. (DAO). Read on…

Investor Alert: “Buy the Rumor, Sell the News!”

Everyone knows that the Fed is going to cut rates at some point this year. That is the worst kept secret on the planet helping to explain how we keep making new highs for the for the S&P 500 (SPY). Unfortunately that creates an interesting predicament for stocks after rates are cut. Plus another hurdle in the 2024 Presidential election. Steve Reitmeister is here to share his insights on the market outlook along with a preview of his top 12 stocks to outperform. Read on for more...

Read More Stories

More Boyd Gaming Corporation (BYD) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All BYD News