Boyd (BYD) Down 11.6% Since Last Earnings Report: Can It Rebound?

It has been about a month since the last earnings report for Boyd Gaming (BYD). Shares have lost about 11.6% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Boyd 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 drivers.

Boyd Gaming Q2 Earnings Miss, Revenues Beat Estimates

Boyd Gaming reported mixed second-quarter 2019 results, wherein earnings missed the Zacks Consensus Estimate but revenues surpassed the same. Notably, the company’s earnings have either missed or met the consensus estimate in the trailing four quarters.

Adjusted earnings in the quarter under review came in at 46 cents per share, which lagged the Zacks Consensus Estimate by a couple of cents. The bottom line, however, increased 21.1% year over year on higher margins.

Revenues totaled $846.1 million, which exceeded the consensus estimate of $840 million. The top line also improved 37.2% on a year-over-year basis. Revenue growth can primarily be attributed to year-over-year gain at the Downtown Las Vegas, and Midwest and South segments.

Notably, the company’s second-quarter results also include revenues worth $228.5 million realized from the acquisitions of Ameristar Kansas City, Ameristar St. Charles, Belterra Resort and Belterra Park, Valley Forge Casino Resort and Lattner Entertainment.

Segmental Details

Las Vegas Locals

Revenues at this segment amounted to $220.9 million, up 0.4% year over year. Moreover, the segment’s EBITDAR increased to $71.4 million from $70.2 million in the year-ago quarter. This segment recorded the highest second-quarter adjusted EBITDAR in the 14 years.

Downtown Las Vegas

At this segment, revenues rose 5.4% to $64.5 million. Adjusted EBITDAR increased to $15.9 million from $13.5 million in the prior-year quarter driven by growth at all three downtown properties. The segment also benefited from the company’s solid Hawaiian customer base.

The Midwest and South Segment

Revenues at this segment improved 67.1% to $560.7 million. Adjusted EBITDAR was $165.1 million, up from $98.5 million in the year-ago period. Additionally, the segment reported a fifth straight quarter of same-store adjusted EBITDAR growth in the quarter under review.

Modifications to marketing programs and operational capabilities drove the segment’s revenues and EBITDAR. Further, the acquisition of Valley Forge Casino Resort and Lattner Entertainment contributed to the segment’s quarterly performance.

Other Financial Details

As of Jun 30, 2019, Boyd Gaming had cash on hand of $239.4 million. Total debt amounted to $3.95 billion.

For 2019, Boyd Gaming continues to expect total adjusted EBITDA of $885-$910 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

At this time, Boyd has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. 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. 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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