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Boyd Gaming (BYD) Surges 204% in a Year: More Upside Left?

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·4 min read
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Boyd Gaming Corporation BYD is poised to benefit from its interactive gaming platform and the FanDuel Group partnership. This along with a focus on expansion initiatives bodes well.

Shares of Boyd Gaming have gained 203.6% over the past year compared with the Zacks Gaming industry’s 235.2% rise. Although the share price slightly lagged the industry’s rally, earnings estimates for 2021 have moved up 0.3% over the past 60 days. Apart from the above-mentioned tailwinds, the price performance was backed by a solid earnings surprise history. Boyd Gaming’s earnings surpassed the Zacks Consensus Estimate in six of the trailing seven quarters. This positive trend signifies bullish analyst sentiments and justifies the company’s Zacks Rank #2 (Buy), indicating robust fundamentals and expectations of outperformance in the near term. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Major Growth Drivers

Boyd Gaming has been benefiting from its increased focus on the interactive gaming platform. Thanks to the strategic partnership with FanDuel, the company is optimistic regarding its future in the iGaming industry. In September 2020, the company collaborated with Aristocrat Technologies for the launch of a new digital initiative — B Connected Mobile. The application enhances customer experience along with frictionless access to its range of online, social and mobile gaming brands. In 2020, online gaming contributed more than $10 million in EBITDAR, backed by FanDuel's mobile sports operation in Pennsylvania, Illinois, Indiana, Iowa and Mississippi. For 2021, the company expects EBITDAR to be more than $20 million.

Moreover, Boyd Gaming has been undertaking efforts to expand its online betting offerings. During the third quarter of 2019, the company partnered with FanDuel Group and opened sportsbooks at Blue Chip, Belterra Resort, Diamond Jo Dubuque and Diamond Jo Worth properties in the Midwest. During the second quarter of 2020, the company expanded its partnership with FanDuel Group, which includes retail sportsbooks at seven Boyd properties, mobile sports betting apps in Pennsylvania and Indiana and the online gaming site in Pennsylvania. During the third quarter of 2020, the company continued to expand its partnership with FanDuel Group, thereby launching mobile sports betting products in Illinois and Iowa. Going forward, the company is optimistic about its online gaming prospects in Ohio, Louisiana, Missouri and Kansas.

Apart from FanDuel, the company continues to focus on the Stardust brand to expand its online gaming presence. During second-quarter 2021, it rolled out Stardust online casinos in Pennsylvania and New Jersey.

Meanwhile, the company is benefiting from increased traffic from local and regional customer bases. Boyd Gaming considers the local market in Las Vegas as a major driver for its portfolios. During the first quarter, gaming revenues in local markets witnessed heightened consumer confidence on the back of ramped-up vaccination drives and easing of capacity restrictions. Notably, segment revenues were up approximately 4% from the 2019 level.

Nonetheless, the company continues to expand its portfolio by strengthening current operations and growing through capital investments and other strategic measures. Currently, the company is working on Wilton Rancheria resorts, which is positioned as the closest Class 3 casino to Downtown Sacramento in the South Bay area. The company expects to open the property by the second half of 2022.

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Zacks Investment Research

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Other Key Picks

Other better-ranked stocks in the same industry include Red Rock Resorts, Inc. RRR, Accel Entertainment, Inc. ACEL and Corsair Gaming, Inc. CRSR. Red Rock Resorts carries a Zacks Rank #1 (Strong Buy). Accel Entertainment and Corsair Gaming have a Zacks Rank #2.

Red Rock Resorts and Accel Entertainment’s earnings for 2021 are expected to surge 102.8% and 785.7%, respectively.

Corsair Gaming has a trailing four-quarter earnings surprise of 57.1%, on average.

Zacks Names “Single Best Pick to Double”

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

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Boyd Gaming Corporation (BYD) : Free Stock Analysis Report

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