Boyd Gaming Corporation BYD is benefiting from increased visitation and strong performance in its Downtown Las Vegas and Midwest & South segments. Investments in property improvements and expansions are supporting growth. The company is also experiencing solid performance in its Online and Managed businesses.
Shares of this Zacks Rank #3 (Hold) company have gained 33.7% in the past six months compared with the Zacks Gaming industry’s 10.4% growth. However, increased costs and expenses are concerning.
The Zacks Consensus Estimate of the company’s 2025 earnings per share (EPS) has moved south from $6.62 to $6.61 in the past 60 days. However, the estimated value indicates 3.8% year-over-year growth. This multi-jurisdictional gaming company also showcases a VGM Score of A, backed by a Value Score of A and Growth and Momentum Score of B. This positive trend signifies bullish analysts’ sentiments and robust fundamentals in the near term.
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Attractive Factors of BYD Stock
Increased Visitation: The company is benefiting from the increase in visitation. In the third quarter of 2024, the company witnessed encouraging customer trends within its Las Vegas local segment, indicating patterns consistent with those seen in the first half of the year. Despite the competitive pressures faced by the Orleans and Gold Coast properties, the rest of the Las Vegas local segment aligned with broader market trends, maintaining stability.
The downtown Las Vegas segment delivered strong quarterly performance, driven by recent property investments and increased Hawaiian visitation. The Fremont property led the segment with record third-quarter revenues and EBITDAR performance, benefiting from sustained pedestrian traffic throughout the downtown area.
Growth Through Expansion: The company is focused on driving growth through strategic portfolio expansion, including capital investments and acquisitions. By strengthening existing operations and pursuing new opportunities, the company aims to enhance its brand presence and market position. In the third quarter of 2024, the company acquired the New Jersey operations of Resorts Digital Gaming, marking a small but significant step forward in expanding its regional iGaming business.
In the third quarter of 2024, the company announced that it had secured an opportunity to develop a commercial casino resort property in Norfolk, VA, one of the largest underserved gaming markets in the mid-Atlantic region. This project enables the company to expand its geographic footprint into a new market with a population of 1.8 million residents. Ongoing investments in property enhancements and new developments are expected to contribute to long-term growth, positioning the company for continued success.
Strong Growth in Online Segment: The company is also benefiting from the increase in Online segment revenues. In the first nine months of 2024, the Online segment generated $417.4 million in revenues, up 40% year over year. This uptrend was backed by the company’s partnership with FanDuel, which has solidified its position as the leading sports-betting company in the nation. Adjusted EBITDAR in the Online segment also increased 41.1% year over year to $63.5 million.
Factors Marring BYD’s Prospects
The company’s growth prospects are hindered to a great extent by high-cost scenarios and competitive pressures in its Las Vegas Locals segment. Despite several margin-enhancement initiatives, Boyd Gaming has been grappling with higher wages, utilities and property insurance expenses.
In the first nine months of 2024, food & beverage, room, online as well as selling, general and administrative expenses increased year over year to $187.8 million, $57.7 million, $353.3 million and $315.7 million from $177.6 million, $54.9 million, 252.5 million and 299.3 million, respectively. Total operating costs and expenses increased to $2.22 billion from $2.04 billion reported in the prior year.
Stocks to Consider
Some better-ranked stocks in the Zacks Consumer Discretionary sector are:
Norwegian Cruise Line Holdings Ltd. NCLH currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
NCLH delivered a trailing four-quarter earnings surprise of 4.2%, on average. The stock has surged 43.2% in the past year. The Zacks Consensus Estimate for NCLH’s 2025 sales and EPS indicates growth of 8.3% and 25%, respectively, from the year-ago levels.
Choice Hotels International, Inc. CHH currently sports a Zacks Rank #1. CHH delivered a trailing four-quarter negative earnings surprise of 8.3%, on average. The stock has surged 22.4% in the past six months.
The Zacks Consensus Estimate for CHH’ 2025 sales and EPS indicates growth of 3.2% and 4.7%, respectively, from the year-ago levels.
Royal Caribbean Cruises Ltd. RCL currently carries a Zacks Rank #2 (Buy). RCL delivered a trailing four-quarter earnings surprise of 16.2%, on average. The stock has surged 84.5% in the past year.
The Zacks Consensus Estimate for RCL’s 2025 sales and EPS indicates growth of 9.5% and 23.8%, respectively, from the year-ago levels.
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Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
Choice Hotels International, Inc. (CHH) : Free Stock Analysis Report
Boyd Gaming Corporation (BYD) : Free Stock Analysis Report
Norwegian Cruise Line Holdings Ltd. (NCLH) : Free Stock Analysis Report
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