I am looking at this stock because the casinos I go to (Vegas, Chicago, Mississippi, and Florida all have had a large influx of WMS machines replacing the IGT ones. The graphics are superior, the sound better, and the games are more complex and interesting.
I had expected to see a greater revenue increase. Is there a profit margin issue? bad management? (a tip in from what I read on this board). Debt seems to be in good shape.
So as Vegas starts to get busier (and they are) there should be revenue and profit growth.
I would wait for some sign (in terms of shipments from all the major players) that the long awaited replacement cycle has really begun before moving in here. Also pay close attention to ship share by manufacturer as WMS was giving up some hard fought ground, at least the last time I ran the numbers for WMS, IGT, and BYI (and that was a year ago or more). I think you will have plenty of time to get back in for a ride up when that becomes apparent, although the downside risk here doesn't appear large. It could just continue to be dead money for a while.
Margins have been an issue in part due to pricing pressures, in part due to increased internal expense (they are doing a pretty major expansion of the engineering campus on California).
I remain on the sidelines with this one until there's some signs of renewed growth. There's just too many other stocks moving up right now.