Why Is Boyd (BYD) Up 10% Since Last Earnings Report?
A month has gone by since the last earnings report for Boyd Gaming (BYD). Shares have added about 10% 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 the most recent earnings report in order to get a better handle on the important catalysts.
Boyd Gaming Q3 Earnings Miss Estimates, Revenues Top
Boyd Gaming Corporation reported mixed third-quarter 2023 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. The top line increased year over year, while the bottom line declined from the prior-year quarter’s figure. Following the results, shares of the company dropped 3.6% during the after-hours trading session.
Earnings and Revenues
In the quarter under review, adjusted earnings per share (EPS) of $1.36 missed the Zacks Consensus Estimate of $1.44 by 5.6%. In the prior-year quarter, BYD reported adjusted EPS of $1.48.
Total revenues of $903.1 million surpassed the consensus estimate of $873 million by 3.4%. The top line increased 3% on a year-over-year basis. Solid contributions from Sky River, online gaming and non-gaming businesses primarily backed the upside.
Total adjusted EBITDAR amounted to $320.8 million compared with $337.7 million reported in the prior-year quarter
Segmental Detail
Las Vegas Locals: Revenues of $221.8 million dipped 1.8% from the prior-year quarter. Our estimate for the metric was $229.1 million. Adjusted EBITDAR totaled $106 million compared with $111.7 million reported in the year-ago quarter.
Downtown Las Vegas: During the third quarter, the segment revenues reached $49.5 million, almost flat sequentially. Adjusted EBITDAR was $15.9 million compared with $17.7 million reported in the year-ago quarter.
Midwest and South Segment: Revenues of $513 million fell 2.8% from the year-earlier quarter. Our model estimated the metric to decrease by 0.6% year over year. Adjusted EBITDAR totaled $190.6 million compared with $211.3 million in the year-ago period.
Operating Highlights
During third-quarter 2023, the company’s total operating costs and expenses were $685.3 million, up 7.1% year over year. Selling, general and administrative expenses of $99.9 million rose 7.5% from the year-ago quarter’s levels.
Balance Sheet
As of Sep 30, Boyd Gaming had cash on hand of $269.2 million compared with $260.8 million as of Jun 30, 2023. Total debt during the quarter came in at $2.9 billion compared with $3 billion reported in the previous quarter.
During the quarter, the company repurchased shares of its common stock worth $106 million. As of Sep 30, BYD stated the availability of $426 million under its repurchase program.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -8.51% due to these changes.
VGM Scores
At this time, Boyd has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Boyd has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Boyd is part of the Zacks Gaming industry. Over the past month, Las Vegas Sands (LVS), a stock from the same industry, has gained 4.4%. The company reported its results for the quarter ended September 2023 more than a month ago.
Las Vegas Sands reported revenues of $2.8 billion in the last reported quarter, representing a year-over-year change of +178.1%. EPS of $0.55 for the same period compares with -$0.27 a year ago.
For the current quarter, Las Vegas Sands is expected to post earnings of $0.63 per share, indicating a change of +431.6% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
Las Vegas Sands has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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