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Boyd (BYD) Up 7.1% Since Last Earnings Report: Can It Continue?

Zacks Equity Research
·4 min read

It has been about a month since the last earnings report for Boyd Gaming (BYD). Shares have added about 7.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Boyd due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Boyd Gaming Q2 Earnings Beat Estimates, Decline Y/Y

Boyd Gaming reported second-quarter 2020 results, wherein both the top and the bottom line beat the Zacks Consensus Estimate. However, earnings and revenues declined sharply year over year on account of the coronavirus pandemic.

The company also stated that it is making significant progress in its digital platform with the launch of the Stardust Social Casino mobile app. Moreover, the company along with FanDuel Group rolled out the online casino product in Pennsylvania. Notably, the company intends to capitalize on the growth opportunity with interactive gaming and mobile sports betting.

Q2 Earnings and Revenues

In the quarter under review, adjusted loss per shares came in at 98 cents, narrower than the Zacks Consensus Estimate of a loss of $1.45. In the prior-year quarter, the company had reported adjusted earnings of 46 cents per share.

Total revenues of $209.9 million beat the consensus mark of $167 million by 25.7%. However, the top line declined 75.2% on a year-over-year basis.

Total adjusted EBITDAR during the reported quarter came in at $16.1 million, down 93.1% year over year.

Segmental Details

Las Vegas Locals

Revenues at this segment amounted to $48.7 million, down 78% year over year. Moreover, the segment’s adjusted EBITDAR came in at $2.9 million compared with $71.4 million in the year-ago quarter.

Downtown Las Vegas

Revenues at the segment declined 92.8% from the prior-year quarter’s figure to $4.7 million. Adjusted EBITDAR came in at ($7.2) million against $15.9 million reported in the year-ago quarter. The decline can primarily be attributed to reduced visitation to Las Vegas as well as lower business volumes from the company's Hawaiian customer base.

Midwest and South Segment

Revenues at this segment fell 72.1% from the prior-year quarter’s figure to $156.5 million. Adjusted EBITDAR was reported at $32.7 million, down from $165.1 million in the year-ago quarter. Although the segment performed exceptionally well post reopenings, dismal traffic due to the coronavirus outbreak is likely to hurt margins going forward.

Other Financial Details

As of Jun 30, 2020, the company had cash on hand of $1.31 billion. This reflects $670.0 million that was drawn from the company's revolving credit facilities on Mar 16, 2020 as well as $600 million of 8.625% senior notes (due 2025) issued on May 21, 2020. Total debt amounted to $4.98 billion.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 100% due to these changes.

VGM Scores

Currently, Boyd has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Boyd has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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