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Why Is Boyd (BYD) Up 25% Since Last Earnings Report?

Zacks Equity Research
·3 min read

It has been about a month since the last earnings report for Boyd Gaming (BYD). Shares have added about 25% 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 Misses on Q1 Earnings, Cancels EBITDAR View

Boyd Gaming reported preliminary first-quarter 2020 results, wherein both top and bottom lines missed the Zacks Consensus Estimate. Moreover, both earnings and revenues declined sharply year over year on account of the coronavirus pandemic.

The company provided preliminary first-quarter 2020 results as it has not completed final closing procedures associated with reviews of goodwill, intangibles and certain other long-lived assets for impairment and the related income tax provision adjustments.

Q1 Earnings and Revenues

In the quarter under review, adjusted loss per shares came in at 2 cents. The figure lagged the Zacks Consensus Estimate of earnings of 23 cents. In the prior-year quarter, the company had reported adjusted earnings of 43 cents per share.

Total revenues of $680.5 million missed the consensus mark of $774 million. Moreover, the top line declined 47.7% year over year.

Total adjusted EBITDAR during the reported quarter totaled $144.4 million, down 35.2% year over year.

Segmental Details

Las Vegas Locals

Revenues in this segment amounted to $180.8 million, down 18.9% year over year. Moreover, the segment’s adjusted EBITDAR came in at $46.8 million compared with $74.2 million in the year-ago quarter.

Downtown Las Vegas

Revenues in the segment declined 14.1% from the prior-year quarter’s figure to $54.1 million. Adjusted EBITDAR of $10 million fell 50% from $15 million in the prior-year quarter. The decline can primarily be attributed to the coronavirus pandemic.

Midwest and South Segment

Revenues in this segment decreased 17.7% from $445.6 million in the year-ago quarter. Adjusted EBITDAR was $105.8 million, down from $156.5 million in the year-ago quarter. The segment performance was robust in the first two months of the quarter but the coronavirus outbreak hurt results in the last month.

Other Financial Details

As of Mar 31, 2020, the company had cash on hand of $831.2 million, which includes $670.0 million that was drawn from the company's revolving credit facilities on Mar 16, 2020. Total debt amounted to $4.44 billion.

Withdraws 2020 Guidance

The company has withdrawn adjusted EBITDAR guidance citing the coronavirus outbreak. Moreover, the company announced that all Boyd Gaming properties will remain closed to the public as of Apr 28, 2020.

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 -2216.54% due to these changes.

VGM Scores

Currently, Boyd has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. 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. 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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