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Boyd Gaming (BYD) Stock Gains 12% YTD: Will Growth Continue?

Zacks Equity Research

Shares of Boyd Gaming Corporation BYD are displaying an uptrend backed by solid top- and bottom-line growth, portfolio expansion and EBITDAR improvement. Year to date, the stock has gained 12.2% compared with the industry’s 4.3% rally. However, high debt and costs remain a concern. Let’s delve deeper.

Key Catalysts

Boyd Gaming continues to impress investors with robust top- and bottom-line performance. In 2017 and 2018, revenues grew 9.1% and 9.6%, respectively. On the earnings front, the metric increased a respective 21.9%, 46.2%, 4.5% and 45.5% in the first, second, third and fourth quarters of 2018. On a year-over-year basis, the bottom line improved 10.3% and 21.1% in the first and second quarter of 2019, respectively, on higher margins. Meanwhile, the top line increased 36.5% and 37.2% each in the first and second quarter of 2019, on a year-over-year basis.

Moreover, the company is expanding its sports betting footprint. In 2018, Boyd Gaming unveils sports books at its two Mississippi properties, IP Casino Resort Spa (“IP”) in Biloxi, and Sam’s Town Hotel & Gambling Hall in Tunica. In addition, it entered into a partnership with FanDuel Group to pursue sports betting and online gaming opportunities across the United States. By September 2019, FanDuel is likely to launch sports book at Blue Chip, Belterra Resort, Diamond Jo Dubuque and Diamond Jo Worth.

By strengthening its current operations and growing through capital investment as well as other strategic measures, Boyd Gaming continues to expand its portfolio.

Boyd Gaming has been generating EBITDAR growth for quite some time. In second-quarter 2019, the company reported EBITDAR growth for the 17th quarter out of the last 18 quarters. Adjusted EBITDAR was $232.6 million in the same quarter, up 42.3% year over year. Its Las Vegas business achieved 17th successive quarter of EBITDAR growth as well.

For 2019, Boyd Gaming expects EBITDAR of $885-$910 million. The company has also been reporting robust operating margin expansion for the past several quarters.


Boyd Gaming’s high debt and costs remain major concerns. The company ended second-quarter 2019 with total debt of $3.95 billion. It might fail to finance upcoming projects due to higher debt burden.

Boyd Gaming faces higher expenses across gaming, food and beverage, room, and other offerings. Also, the company incurred high SG&A costs in the first and second quarter of 2019. Total operating costs and expenses in the first and second quarter of 2019 increased 38.8% and 32.6%, respectively, year over year. SG&A expenses were driven by food and beverage, room and other.

Zacks Rank & Key Picks

Boyd Gaming, which shares space with Melco Resorts & Entertainment Limited MLCO, has a Zacks Rank #3 (Hold). Better-ranked stocks worth considering in the same space include Penn National Gaming, Inc. PENN and SciPlay Corporation SCPL. While Penn National Gaming sports a Zacks Rank #1 (Strong Buy), SciPlay carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Penn National Gaming has an impressive long-term earnings growth rate of 10%.

SciPlay’s second-quarter 2019 earnings surpassed the Zacks Consensus Estimate by 200%.

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Boyd Gaming Corporation (BYD) : Free Stock Analysis Report
Penn National Gaming, Inc. (PENN) : Free Stock Analysis Report
Melco Resorts & Entertainment Limited (MLCO) : Free Stock Analysis Report
SciPlay Corporation (SCPL) : Free Stock Analysis Report
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