As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the casino operator industry, including Golden Entertainment (NASDAQ:GDEN) and its peers.
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.
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 print fell short of analysts’ expectations by 1.3%. Overall, it was a softer quarter for the company with a miss of analysts’ Hotel revenue estimates and a significant miss of analysts’ adjusted operating income estimates.
Golden Entertainment delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 35.5% since reporting and currently trades at $28.77.
Read our full report on Golden Entertainment 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 achieved 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.
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, in line with analysts’ expectations. It was a disappointing quarter as it posted a miss of analysts’ Hotel revenue estimates and a significant miss of analysts’ adjusted operating income estimates.
As expected, the stock is down 1.5% since the results and currently trades at $30.52.
Read our full analysis of MGM Resorts’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 print lagged analysts' expectations by 1.7%. Aside from that, 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.
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 $475.6 million, up 1.6% year on year. This number missed analysts’ expectations by 0.8%. Zooming out, it was a mixed quarter as it also logged a beat of analysts’ EPS estimates but a miss of analysts’ Hotel revenue estimates.
The stock is down 8% since reporting and currently trades at $54.53.
Read our full, actionable report on Red Rock Resorts here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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