Here's Why Investor Should Hold on to Boyd Gaming (BYD) Now
Boyd Gaming Corporation BYD is benefiting from expansion of online betting offerings, strong balance sheet and initiatives to strengthen current operations. Consequently, the company’s shares have gained 53.3% in the past three months, compared with the industry’s growth of 16.9%. However, resurgence in COVID-19 cases might hurt the company’s performance. Let’s delve deeper.
Catalysts Driving Growth
Boyd Gaming has also been undertaking efforts to expand online betting offerings. During second-quarter 2020, the company expanded its partnership with FanDuel Group, which includes retail sports books at seven Boyd properties, mobile sports betting apps in Pennsylvania and Indiana, and the online gaming site in Pennsylvania. During third-quarter 2020, the company continued to expand its partnership with FanDuel Group, thereby launching mobile sports betting products in Illinois and Iowa.
Since the coronavirus outbreak, Boyd Gaming has been witnessing solid performance by the interactive gaming platform. Owing to the strategic partnership with FanDuel, the company is optimistic regarding its future in the iGaming industry. During the second quarter, the company launched Stardust brand and social casino to boost presence in the interactive gaming platform.
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 and enables frictionless access to its range of online, social and mobile gaming brands. This also provides access to Nevada-based sports betting app such as FanDuel, Stardust and B Connected Sports. Meanwhile, the company has initiated the launch of cashless wallet technology in Northern Indiana. Going forward, it plans to integrate the wallet into B Connected mobile, thereby expanding services to additional amenities and Boyd Gaming properties. However, these are subject to regulatory approvals.
Moreover, the company has a strong balance sheet, which will help it tide over the coronavirus pandemic. At the end of the third quarter, Boyd Gaming had cash and cash equivalents of $506 million as of Sep 30, compared with $1.31 billion as on Jun 30, 2020. However, total debt during the third quarter amounted to $4.04 billion, compared with $4.98 billion in second-quarter 2020. Further, the company stated that it has enough liquidity to survive the pandemic scenario for the next 12 months. Meanwhile, the debt-to-capitalization ratio at the end of the third quarter came in at 0.8, thereby indicating manageable debt levels.
Concerns
Boyd Gaming’s financials in 2020 are likely to be impacted by the pandemic. Although majority of the properties have reopened, the company is facing dismal traffic due to coronavirus apprehensions. Since the severity and duration of the outbreak’s impact on its business cannot be estimated at present, the company has not only suspended its share repurchase programs but has also withdrawn its 2020 guidance.
Zacks Rank & Key Picks
Boyd Gaming, which shares space with Penn National Gaming, Inc. PENN, currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the same space include Golden Entertainment, Inc. GDEN and Monarch Casino & Resort, Inc. MCRI, both carrying a Zacks Rank #2 (Buy).
Earnings for Golden Entertainment and Monarch Casino in 2021 are likely to surge 91.1%, and 179.3%, respectively.
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Penn National Gaming, Inc. (PENN) : Free Stock Analysis Report
Boyd Gaming Corporation (BYD) : Free Stock Analysis Report
Monarch Casino & Resort, Inc. (MCRI) : Free Stock Analysis Report
Golden Entertainment, Inc. (GDEN) : Free Stock Analysis Report
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