The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how casino operator stocks fared in Q1, starting with Red Rock Resorts (NASDAQ:RRR).
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 Q1; on average, revenues beat analyst consensus estimates by 0.5%. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, and casino operator stocks have held roughly steady amidst all this, with share prices up 5% on average since the previous earnings results.
Red Rock Resorts (NASDAQ:RRR) Founded in 1976, Red Rock Resorts (NASDAQ:RRR) operates a range of casino resorts and entertainment properties, primarily in the Las Vegas metropolitan area.
Red Rock Resorts reported revenues of $488.9 million, up 12.7% year on year, in line with analysts' expectations. Overall, it was a weak quarter for the company with a miss of analysts' earnings estimates.
The stock is up 12.1% since reporting and currently trades at $60.94.
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Best Q1: MGM Resorts (NYSE:MGM) 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 $4.38 billion, up 13.2% year on year, outperforming analysts' expectations by 3.7%. It was a very strong quarter for the company with an impressive beat of analysts' earnings estimates and a decent beat of analysts' Casino revenue estimates.
MGM Resorts achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 16% since reporting. It currently trades at $46.09.
Weakest Q1: Caesars Entertainment (NASDAQ:CZR) Formerly Eldorado Resorts, Caesars Entertainment (NASDAQ:CZR) is a global gaming and hospitality company operating numerous casinos, hotels, and resort properties.
Caesars Entertainment reported revenues of $2.74 billion, down 3.1% year on year, falling short of analysts' expectations by 2.8%. It was a weak quarter for the company with a miss of analysts' earnings estimates.
Caesars Entertainment posted the weakest performance against analyst estimates in the group. Interestingly, the stock is up 7.9% since the results and currently trades at $38.72.
PENN Entertainment (NASDAQ:PENN) Established in 1982, PENN Entertainment (NASDAQ:PENN) is a diversified American operator of casinos, sports betting, and entertainment venues.
PENN Entertainment reported revenues of $1.61 billion, down 4% year on year, falling short of analysts' expectations by 1.1%. More broadly, it was a weak quarter for the company with a miss of analysts' earnings estimates.
The stock is up 18.6% since reporting and currently trades at $19.46.
Golden Entertainment (NASDAQ:GDEN) Founded in 2001, Golden Entertainment (NASDAQ:GDEN) is a gaming company operating casinos, taverns, and distributed gaming platforms.
Golden Entertainment reported revenues of $174 million, down 37.4% year on year, surpassing analysts' expectations by 3.2%. Taking a step back, it was a very strong quarter for the company with an impressive beat of analysts' earnings estimates.
Golden Entertainment had the slowest revenue growth among its peers. The stock is up 1.9% since reporting and currently trades at $31.22.
This content was originally published on Stock Story
