Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Golden Entertainment’s outlook
David Bain of Texas Capital May 8 reviewed Golden Entertainment’s earnings call and results.
“Following Golden’s in-line EBITDA result and earnings call, our forecast is essentially unchanged,” Bain wrote. “On its call, Golden noted current/2Q trend strength in both its Nevada casinos and Locals segments (combined ~86% of EBITDA). It also made clear, in our view, it believes its share price is dislocated with operating fundamentals, leaving share repurchases as its priority versus M&A. We believe Golden is staged to eliminate over ~15%+ of Golden’s freely tradable float this year after eliminating ~14% of it last year.
“Buybacks combine with its 4% dividend yield, essentially ‘paying investors to wait’ for a valuation re-rating closer to historical averages/peers and/or earnings upside, both of which may occur by the second half of 25E, in our view.”
DraftKings’ earnings call
Truist Securities’ Barry Jonas May 11 weighed in on DraftKings’ 1Q25 earnings call.
“DraftKing again overcame hold-related weakness and posted a better quarter than we feared (more in-line with the Street), though did guide down (revenues/EBITDA -2%/-11%) on March Madness. Investor debates continue around slowing handle growth, sport-related weakness (structural vs. actual hold) and prediction markets, though DraftKing’s and Flutter’s (FLUT, Buy) confident commentary give us comfort in the digital operators’ long-term growth trajectory. We adjust our 2025E EBITDA for new guidance (to the new midpoint), with no changes at this time to 2026E, our price target or our Buy rating.”
Jefferies’ Digital Gaming Brand Matrix
In a May 11 release, David Katz of Jefferies examined its Digital Gaming Brand Matrix, which “incorporates app-level data, social media engagement, and web-traffic data to provide insights on brand momentum and serve as a proxy for market share.”
According to this metric, FanDuel was dominant in April.
“FanDuel again maintained its top spot in all three of our primary metrics: Google Search Interest, Web Traffic Visits, and Webpage Visit Duration, marking the seventh consecutive month of a #1 ranking in each category,” Katz wrote. “Likewise, DraftKings again took the #2 spot in each category, while BetMGM was again #3 in Web Traffic and Webpage Visit Duration, while it is a slightly lower #5 in Google Search Interest, behind Hard Rock and Bet365.”
Inspired Entertainment’s revenue falls below consensus
Josh Nichols of B Riley Associates May 9 looked at Inspired Entertainment’s digital growth.
“Buy-rated Inspired Entertainment, ($13 price target) reported 1Q25 on Thursday, May 8. Revenue of $60 million was below consensus and our $67 million/$65 million although the shortfall was attributable to lower-than-expected hardware revenue.
“While regulatory shifts in Brazil temporarily disrupted virtual sports (-30% year-over-year and 14% of sales), performance stabilized as the quarter progressed, with new partnerships and a focus on growth positioning the segment for a rebound as the year progresses. Separately, management is actively progressing toward the divestiture of its capital-intensive Holiday Park business, which will expedite the company’s digital transition and expand EBITDA margin. We reduce our 2025 revenue estimate by 2% or $6 million to $300 million, although $5 million of the adjustment is explicitly attributable to the shortfall in 1Q.”
Penn Entertainment outlook positive
Penn Entertainment’s earnings call was scrutinized by Truist’s Barry Jonas May 8.
“PENN’s Q1 came in -5%/-6% below us/Street on elevated legal expenses, bad weather and unfavorable March Madness (-$28 million impact total), with underlying trends solid, in our view,” Jonas wrote. “Management rolled through poor sports hold into the guide though held all else steady, ex-impact for higher legal costs in corporate. Land-based commentary/trends into April and May (on the call and our group follow up) were encouraging, along with interactive strength in igaming and omni-channel. We remain positive for the same reasons outlined in our upgrade last spring and reiterate our Buy rating with shares dislocated. We move to the new 2025E guide midpoint with no change to 2026E. Price target remains $20.”
