Why Is Caesars Entertainment (CZR) Down 25.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Caesars Entertainment (CZR). Shares have lost about 25.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Caesars Entertainment due for a breakout? 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.
Caesars Q1 Loss Narrower Than Expected, Revenues Up Y/Y
Caesars Entertainment reported unimpressive results in first-quarter 2022. The company generated wider loss on a year-over-year basis in the quarter. Revenues missed the Zacks Consensus Estimate but increased from the year-ago quarter’s levels.
Earnings & Revenue Discussion
In the quarter under review, the company posted an adjusted loss per share (EPS) of $2.11, narrower than the Zacks Consensus Estimate of a loss of $2.15. In the prior-year quarter, the company had reported a loss of $2.01 per share.
Net revenues during the quarter were $2,292 million, which lagged the Zacks Consensus Estimate of $2,311 million by 0.8% but increased 27.9% from the prior-year quarter’s $1,792 million.
Same-store adjusted EBITDA of $296 million was significantly down from $521 million reported in the prior-year quarter. Same-store adjusted EBITDA, excluding Caesars’ Digital segment, was $850 million during the quarter compared with $530 million in the year-ago quarter.
Segmental Performance
During the quarter, net revenues from the Las Vegas segment were $914 million compared with $497 million reported in the year-ago quarter. The segment’s adjusted EBITDA was $400 million compared with $162 million in the prior-year quarter.
Coming to the Regional segment, net revenues during the quarter were $1,363 million compared with $1,191 million in the year-ago quarter. The segment’s adjusted EBITDA totaled $459 million compared with $393 million in the prior-year quarter.
Net revenues from the Caesars Digital segment in the quarter were negative $53 million versus $39 million in the prior-year quarter. The segment’s adjusted EBITDA came in at a negative $554 million compared with a negative $2 million reported in the year-ago quarter.
In the Managed and Branded segment, net revenues during the quarter were $66 million compared with $61 million in the prior-year quarter. The segment’s adjusted EBITDA amounted to $20 million compared with $21 million in the prior-year quarter.
Balance Sheet
As of Mar 31, 2022, the company’s cash and cash equivalents were $814 million compared with $1,070 million as of Dec 31, 2021.
Net debt as of Mar 31, 2022, stood at $13,492 million compared with $13,253 million as of Dec 31, 2021.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 28.68% due to these changes.
VGM Scores
At this time, Caesars Entertainment 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 second quintile 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 upward for the stock, and the magnitude of these revisions looks promising. Notably, Caesars Entertainment has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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