The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how MGM Resorts (NYSE:MGM) and the rest of the casino operator stocks fared in Q3.
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 Q3. As a group, revenues beat analysts’ consensus estimates by 1.5%.
While some casino operator stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.6% since the latest earnings results.
Weakest Q3: 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 $4.25 billion, up 1.6% year on year. This print was in line with analysts’ expectations, but overall, it was a disappointing quarter for the company with a miss of analysts’ Hotel revenue estimates and a significant miss of analysts’ adjusted operating income estimates.
"MGM Resorts delivered another quarter of consolidated net revenue growth as we benefit from our operational scale and diversity, highlighted by record third quarter results from MGM China," said Bill Hornbuckle, Chief Executive Officer & President of MGM Resorts International.
Unsurprisingly, the stock is down 1.5% since reporting and currently trades at $30.52.
Read our full report on MGM Resorts here, it’s free for active Edge members.
Best Q3: Boyd Gaming (NYSE:BYD)
Run by the Boyd family, Boyd Gaming (NYSE:BYD) is a diversified operator of gaming entertainment properties across the United States, offering casino games, hotel accommodations, and dining.
Boyd Gaming reported revenues of $1.00 billion, up 4.5% year on year, outperforming analysts’ expectations by 15.7%. The business performed better than its peers, but it was unfortunately a mixed quarter with an impressive beat of analysts’ revenue estimates but a significant miss of analysts’ adjusted operating income estimates.
Boyd Gaming scored the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 8.2% since reporting. It currently trades at $78.02.
Is now the time to buy Boyd Gaming? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 $1.72 billion, up 4.8% year on year, falling short of analysts’ expectations by 0.5%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.
As expected, the stock is down 15.8% since the results and currently trades at $13.77.
Read our full analysis of PENN Entertainment’s results here.
Monarch (NASDAQ:MCRI)
Established in 1993, Monarch (NASDAQ:MCRI) operates luxury casinos and resorts, offering high-end gaming, dining, and hospitality experiences.
Monarch reported revenues of $142.8 million, up 3.6% year on year. This result came in 1.7% below analysts' expectations. Zooming out, it was a mixed quarter as it also produced a beat of analysts’ EPS estimates but a miss of analysts’ Dining revenue estimates.
Monarch had the weakest performance against analyst estimates among its peers. The stock is down 2.2% since reporting and currently trades at $95.12.
Read our full, actionable report on Monarch here, it’s free for active Edge members.
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 $154.8 million, down 4% year on year. This number lagged analysts' expectations by 1.3%. Overall, it was a softer quarter as it also logged a miss of analysts’ Hotel revenue estimates and a significant miss of analysts’ adjusted operating income estimates.
Golden Entertainment had the slowest revenue growth among its peers. The stock is up 35.5% since reporting and currently trades at $28.77.
Read our full, actionable report on Golden Entertainment here, it’s free for active Edge members.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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