Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Truist Securities’ Las Vegas meetings
Truist Securities analyst Barry Jonas May 20 posted about recent meetings the company had in Las Vegas with operators including MGM Resorts, Caesars, Boyd Gaming, Wynn Resorts, Red Rock Resorts, Golden Entertainment, the Venetian and Rio. Gaming tech meetings included Light & Wonder, Everi, IGT, Gaming Arts, and Walker Digital Table Systems.
Jonas’ takeaways include:
- “The Strip remains resilient in the near term, with operators under our coverage set to benefit in second half (of 2024), more so at the higher end from room supply constraints and a broader-based Formula 1.”
- “Locals trends remain shakier, between higher promos and a softer low-end customer.”
- “For the Regionals, the higher-end continues to offset the lower end netting to generally flattish growth.”
- “B2B consolidation with the IGT/Everi deal is a play on scale to hopefully remove size discounts.
Sportradar
Analyst David Katz of Jefferies, in a May 19 statement, wrote that Sportradar “is inching higher towards a solid business. The quarterly report this past week was higher than expectations, with revenue and adjusted EBITDA higher by 28.1% and 28.7% year-over-year, respectively. The shares rose on the report and are up 15% for the week. The key driver is the depth of clarity the company can offer the Street on its core product offerings and how to manage expectations around it. Furthermore, we believe the company’s new reported segments provide greater coherence to the business.”
Gaming and Lodging markets
In an overview of Gaming and Lodging markets, J.P. Morgan’s Joseph Greff wrote that “Revenue and EBITDA/R growth/generation is decelerating across most gaming and leisure markets/ sub-sectors. This ‘normalization’ is more pronounced in U.S. Regional Gaming and U.S. Leisure hotel spend, mostly on difficult year-over-year comparisons.”
“The Las Vegas Strip market had a mixed 1Q24 despite the benefit of the Super Bowl in February, with table games drop and slot handle flat to down year-over-year. We are forecasting slowing spend here for the balance of the year, though midweek group and convention remain a bright spot as it lagged last year’s recovery.”
“Macau’s 1Q24 performance was mixed, with Wynn and MGM gaining market share given its premium mass focus and smaller table game and hotel room base to optimally yield and less reliance on base mass and broader visitation recovery. Overall, we like the shape of the market’s premium mass driven recovery.”
“U.S. OSB/igaming revenue growth and ramp to profitability remains unique within Gaming & Lodging.”
Gambling.com
Jefferies analyst David Katz May 19 looked at Gambling.com, writing that the company is “projecting confidence amid change. The company beat on revenues ($29.2 million vs. our $28.2 million) and EBITDA ($10.2 million vs $9.1 million) but indicated a change in Google search terms that affect its media deal capabilities. The upshot is that revenue expectations are lower, but the EBITDA potential remains, given that the media deals affect margins by 700-1,000 basis points. Accordingly, the expectations for 2025 EBITDA remain as prior, given this strong owned-asset traffic and higher margins. We continue to recommend the name.”
