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Why Is Boyd (BYD) Up 22.4% Since Last Earnings Report?

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Zacks Equity Research
·4 min read
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A month has gone by since the last earnings report for Boyd Gaming (BYD). Shares have added about 22.4% 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 drivers.

Boyd Gaming Q4 Earnings Top Estimates, Decline Y/Y

Boyd Gaming reported decent fourth-quarter 2020 results, with the top and the bottom line beating the Zacks Consensus Estimate. Both the metrics surpassed the Zacks Consensus Estimate for the third straight quarter. However, the metrics declined on a year-over-year basis.

President and chief executive officer of Boyd Gaming, Keith Smith, stated: “We achieved record Companywide operating margins for the second consecutive quarter, as nine properties nationwide set fourth-quarter EBITDAR records. In the Midwest & South, we delivered another record EBITDAR performance during the quarter, despite the closures of Par-A-Dice and Valley Forge due to state mandates.”

Q4 Earnings and Revenues

In the quarter under review, adjusted earnings per share came in at 46 cents, topping the Zacks Consensus Estimate of 33 cents by 39.4%. However, the metric declined 8% from prior-year quarter’s earnings of 50 cents per share.

Total revenues of $635.9 million beat the consensus mark of $615 million by 3.5%. However, the top line declined 23.7% on a year-over-year basis.

Total adjusted EBITDAR during the reported quarter came in at $210.5 million, down 7.5% year over year. However, company-wide margins came in at 33.1%, up approximately 580 basis points year over year.

Segmental Details

Las Vegas Locals

During the fourth quarter of 2020, revenues in the segment amounted to $161.5 million, down 27.9% year over year. However, the segment’s adjusted EBITDAR came in at $70.2 million, down 4.2% from the year-ago quarter’s reported figure. During the quarter under review, operating margin rose more than 1,300 basis points (bps) year over year to 46.3%.

Downtown Las Vegas

During the fourth quarter, revenues in the segment declined 73.9% from the prior-year quarter’s figure to $18.2 million. Adjusted EBITDAR came in at ($0.2) million against $19.6 million reported in the year-ago quarter. The decline can primarily be attributed to weakness in tourism in the southern Nevada market.

Midwest and South Segment

During the third quarter, revenues in the segment fell 15.5% year over year to $456.2 million. However, adjusted EBITDAR amounted to $159.5 million, up 1.3% year over year. Meanwhile, operating margin during the quarter rose approximately 580 bps year over year to 39.435% on solid operating performance.

Other Financial Details

As of Dec 31, 2020, the company had cash on hand of $519.2 million compared with $506 million as on Jun 30, 2020. Meanwhile, total debt during the third quarter amounted to $3.95 billion compared with $4.04 billion as reported in third-quarter 2020.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 11.26% due to these changes.

VGM Scores

At this time, Boyd has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. 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 broadly 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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