The resorts and casino markets have rebounded sharply from their pandemic-driven downturns because people are again engaging in outdoor activities and in-person entertainment. The demand for these services is returning to pre-pandemic levels. As part of the commercial gambling market, casinos are gaining traction with increasing visibility and rising prominence on online platforms.
The global casino market is projected to grow at a 3.7% CAGR to $153.20 billion by 2026. Furthermore, the relaxation of gambling regulations, the use of digital currencies in casinos, and technological advancements are expected to propel the industry’s growth in the near term. Resort businesses are also expected to boom because the flexibility of hybrid work arrangements is leading to extended vacations.
Given this backdrop, resort and casino stocks Golden Entertainment, Inc. (GDEN), Monarch Casino & Resort, Inc. (MCRI), Century Casinos, Inc. (CNTY) are gaining significantly and could continue to advance in price. These stocks have outperformed the benchmark S&P 500 index’s 5.3% decline year-to-date.
Golden Entertainment, Inc. (GDEN)
GDEN in Las Vegas owns and operates a diversified entertainment platform in the United States. The company operates through four segments: Nevada Casino Resorts; Nevada Locals Casinos; Maryland Casino Resort; and Distributed Gaming.
GDEN’s total revenues increased 37.1% year-over-year to $281.96 million in its fiscal fourth quarter, ended Dec. 31, 2021. Its operating income totaled $34.49 million, representing a 3,195.7% increase from the same period last year, while its net income increased 203.4% from the prior-year quarter to $19.10 million. Its net income per share increased 189.4% from its year-ago value to $0.59.
The Street expects GDEN’s revenue for its fiscal first quarter, ending March 31, 2022 to come in at $281.34 million, representing a 17.4% increase year-over-year, while its EPS is expected to grow 43.6% year-over-year to $0.50.
GDEN stock has gained 114.6% in price over the past year and 15.5% year-to-date to close the last trading session at $58.36.
GDEN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which translates to Buy in our POWR ratings system. The POWR ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
GDEN also has a B grade in Quality and Value. It is ranked #5 of 33 stocks in the Entertainment – Casinos/Gambling industry.
Beyond what is stated above, we have also rated GDEN for Momentum, Stability, Sentiment, and Growth. Get all the GDEN ratings here.
Monarch Casino & Resort, Inc. (MCRI)
Based in Reno, Nevada, MCRI, through its subsidiaries, owns and operates the Atlantis Casino Resort Spa, a hotel and casino in Reno, Nevada (the Atlantis), and the Monarch Casino Resort Spa Black Hawk (the Monarch Black Hawk), a hotel and casino in Black Hawk, Colorado.
MCRI’s net revenue increased 90.3% year-over-year to $111.07 million in its fiscal fourth quarter, ended Dec. 31, 2021. Its net income grew 30.2% from its year-ago value to $19.87 million, while its adjusted EBITDA improved 180.7% year-over-year to $39.02 million in the same period. Its EPS has increased 27.5% from its year-ago value to $1.02.
The $1.21 consensus EPS estimate for its fiscal first quarter ending March 31, 2022, represents a 187.9% improvement year-over-year. The $105.94 million consensus revenue estimate for the same period represents a 41.3% year-over-year increase. In addition, the company topped the Street’s EPS estimates in each of the trailing four quarters.
The stock has gained 15.1% in price year-to-date to close yesterday’s trading session at $85.14. Over the past six months, it has gained 29.4% in price.
MCRI’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which translates to Strong Buy in our proprietary rating system.
MCRI is also rated an A in Quality and a B in Growth and Sentiment. It is ranked #3 in the Entertainment – Casinos/Gambling industry.
To see additional POWR Ratings for Value, Momentum, and Stability for MCRI, click here.
Century Casinos, Inc. (CNTY)
CNTY is a casino entertainment company that develops and operates gaming establishments and related lodging, restaurant, horse racing, sports betting, iGaming, bowling, and entertainment facilities primarily in North America. It operates through three geographical segments: Canada; the United States; and Poland. CNTY is based in Colorado Springs, Colo.
In late February, CNTY announced that its subsidiaries, Century Downs Racetrack and Casino (CDR) and Century Mile Racetrack and Casino (CMR), had partnered with Betmakers’ Global Racing Network for the distribution of their racing content and facilitation of fixed odds wagering on the racetracks. CNTY has established itself as one of the premier destinations for horse racing in Canada, and this partnership is expected to strengthen its position further by expanding the company’s distribution to new markets, thereby increasing its customer base.
Also, CNTY announced its agreement to acquire Nugget Casino Resort in Nevada. The company expects Nugget to seamlessly integrate and provide added synergies for Century Casinos’ US portfolio.
CNTY’s net operating revenue increased 26.5% from the prior-year quarter to $107.30 million in its fiscal fourth quarter, ended Dec. 31, 2021. The company’s adjusted EBITDA came in at $24.89 million, reflecting a 36% increase year-over-year.
Analysts expect CNTY’s revenue for its fiscal year ending Dec. 31, 2022. to come in at $445.83 million, indicating 14.8% year-over-year growth. The company’s EPS is expected to increase 21.7% year-over-year to $0.80. CNTY also surpassed the consensus EPS estimates in three of the trailing four quarters.
CNTY’s shares have gained 0.3% in price year-to-date and 16.2% over the past month to close the last trading session at $12.22.
It is no surprise that CNTY has an overall A rating, which equates to Strong Buy in our POWR Ratings system.
CNTY has a B grade in Growth, Value, and Quality. It is ranked #2 in the Entertainment – Casinos/Gambling industry.
In addition to the POWR Rating grades I have just highlighted, you can see the CNTY ratings for Momentum, Stability, and Sentiment here.
GDEN shares were trading at $58.35 per share on Wednesday afternoon, down $0.01 (-0.02%). Year-to-date, GDEN has gained 15.48%, versus a -5.87% rise in the benchmark S&P 500 index during the same period.
About the Author: Subhasree Kar
Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics.
3 Outperforming Resort & Casino Stocks with More Room to Run: Golden Entertainment, Monarch, and Century. StockNews.com
