Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at PENN Entertainment (NASDAQ: PENN) and the best and worst performers in the casino operator industry.
Casino operators enjoy limited competition because gambling is a highly regulated industry. These companies can also enjoy healthy margins and profits. Have you ever heard the phrase ‘the house always wins’? Regulation cuts both ways, however, and casinos may face stroke-of-the-pen risk that suddenly limits what they can or can't do and where they can do it. Furthermore, digitization is changing the game, pun intended. Whether it’s online poker or sports betting on your smartphone, innovation is forcing these players to adapt to changing consumer preferences, such as being able to wager anywhere on demand.
The 9 casino operator stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 2.8%.
Thankfully, share prices of the companies have been resilient as they are up 5.1% on average since the latest earnings results.
PENN Entertainment (NASDAQ: PENN)
Established in 1982, PENN Entertainment (NASDAQ: PENN) is a diversified American operator of casinos, sports betting, and entertainment venues.
PENN Entertainment reported revenues of $1.77 billion, up 6.1% year on year. This print exceeded analysts’ expectations by 1.9%. Despite the top-line beat, it was still a mixed quarter for the company with a beat of analysts’ EPS estimates but a significant miss of analysts’ EBITDA estimates.
Jay Snowden, Chief Executive Officer and President, said: “PENN’s diverse portfolio of retail properties delivered another solid quarter. Our Interactive segment generated record gaming revenue in both online sports betting (“OSB”) and online casino (“iCasino”), driven by ongoing product enhancements and the advantages of our unique omnichannel ecosystem.
Interestingly, the stock is up 18.7% since reporting and currently trades at $20.18.
Is now the time to buy PENN Entertainment? Access our full analysis of the earnings results here, it’s free.
Best Q2: Red Rock Resorts (NASDAQ: RRR)
Founded in 1976, Red Rock Resorts (NASDAQ: RRR) operates a range of casino resorts and entertainment properties, primarily in the Las Vegas metropolitan area.
Red Rock Resorts reported revenues of $526.3 million, up 8.2% year on year, outperforming analysts’ expectations by 8.4%. The business had an exceptional quarter with an impressive beat of analysts’ adjusted operating income estimates and a solid beat of analysts’ EBITDA estimates.
Red Rock Resorts scored the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 11.3% since reporting. It currently trades at $61.14.
Is now the time to buy Red Rock Resorts? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Wynn Resorts (NASDAQ: WYNN)
Founded by the former Mirage Resorts CEO, Wynn Resorts (NASDAQ: WYNN) is a global developer and operator of high-end hotels and casinos, known for its luxurious properties and premium guest services.
Wynn Resorts reported revenues of $1.74 billion, flat year on year, falling short of analysts’ expectations by 0.6%. It was a softer quarter as it posted and a significant miss of analysts’ EPS estimates.
Interestingly, the stock is up 15.3% since the results and currently trades at $123.56.
Read our full analysis of Wynn Resorts’s results here.
Monarch (NASDAQ: MCRI)
Established in 1993, Monarch (NASDAQ: MCRI) operates luxury casinos and resorts, offering high-end gaming, dining, and hospitality experiences.
Monarch reported revenues of $136.9 million, up 6.8% year on year. This print topped analysts’ expectations by 5.4%. Overall, it was an exceptional quarter as it also logged a beat of analysts’ EPS estimates and a solid beat of analysts’ adjusted operating income estimates.
The stock is up 19.7% since reporting and currently trades at $104.48.
Read our full, actionable report on Monarch here, it’s free.
Caesars Entertainment (NASDAQ: CZR)
Formerly Eldorado Resorts, Caesars Entertainment (NASDAQ: CZR) is a global gaming and hospitality company operating numerous casinos, hotels, and resort properties.
Caesars Entertainment reported revenues of $2.91 billion, up 2.7% year on year. This number beat analysts’ expectations by 1.2%. Aside from that, it was a slower quarter as it produced a significant miss of analysts’ EPS estimates and a miss of analysts’ adjusted operating income estimates.
The stock is down 9% since reporting and currently trades at $25.89.
Read our full, actionable report on Caesars Entertainment here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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