Analyst takes cautious view of Everi, AGS

Tuesday, August 13, 2024 12:02 PM
Photo:  CDC Gaming
  • United States
  • David McKee, CDC Gaming

Truist Securities analyst Barry Jonas maintained Hold ratings on AGS and Everi Holdings following the release of their second-quarter earnings. He also wrote, “We could see more deals ahead with declining interest rates on the horizon.”

Jonas held the line on his respective price targets for AGS and Everi, $12.50 and $10 per share, respectively. However, he shaved three percent off his cash-flow estimate for Everi this year and one percent for 2025.

Everi reported second-quarter cash flow of $73 million, seven percent under Jonas’s forecast. But its net revenues of $191 million were right on his mark.

The worst of the Everi miss came in its fintech segment, nine percent below where Jonas had it and 15 percent beneath Wall Street’s consensus. Cash flow was $32 million and revenue was $94 million, as Everi processed $12.5 billion in transactions, a seven percent increase.

Everi’s games division missed Jonas’s target by five percent, reporting $43 million in cash flow. Revenues were, again, in line with prognostications, some $94 million.

Everi’s installed base of machines dipped sequentially to 16,614, a net loss of 303 devices, but 1,099 ones were sold. The average sale price was flat at $20,554 per machine.

While Jonas allowed that AGS had a “slight miss” on its cash-flow projections, he said it was made up by “strong Interactive results” that came in $2.5 million ahead of forecasts. The cash-flow result of $37 million was three percent off Jonas’s projection.

AGS also beat the Street in terms of net revenues, three percent better than expected. The company’s installed base increased sequentially by 239 machines to 16,835. AGS sold 1,309 devices at an average price of $20,699 per unit, flat when compared with 2023’s second quarter.