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Accel (ACEL) Expands Gaming Reach With Fairmount Acquisition
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Accel Entertainment, Inc. (ACEL - Free Report) inked a deal to acquire Fairmount Holdings, Inc, the owner of FanDuel Sportsbook & Horse Racing. The acquisition is valued at approximately $35 million.
This strategic move boosts Accel's presence in the Collinsville, IL gaming market. This builds on its strong distributed, route-based platform with an advantaged, single-site local gaming asset. The acquisition includes the horse racing venue in greater St. Louis. ACEL will also gain an Organization Gaming License to offer casino gaming positions. The company will partner with FanDuel to participate in sports wagering in Illinois.
Accel expands its convenience gaming expertise with the addition of a single-site racetrack and a future casino project. The racetrack hosts 65 race days and approximately 435 horse races annually. The company is developing a legislatively authorized casino and holds a master sports betting license used in a revenue share agreement with FanDuel.
Preserving Fairmount’s horse racing legacy and supporting the Illinois Racing Board’s mission, the company aims to develop temporary and permanent casino facilities, improve the horse racing experience and enhance Fairmount’s food and beverage amenities.
Strategic Benefits of the Acquisition
Accel’s emphasizes scaling route-based gaming through organic growth and strategic acquisitions to drive growth. The acquisition of FanDuel Sportsbook & Horse Racing expands Accel’s capabilities to a single-site model, enhancing convenience for local customers.
The company plans to invest $85-$95 million in casino development and track enhancements, anticipating strong five-year Adjusted EBITDA and free cash flow conversion.
The acquisition positions Accel within the estimated $15 billion local gaming total addressable market (TAM), significantly expanding beyond its existing route-based TAM. Local gaming assets, predominantly under family or small business ownership, present opportunities less contested by larger gaming entities, offering a robust platform for future growth.
Price Performance
Shares of this Zacks Rank #3 (Hold) company have increased 5.7% in the past six months compared with the Zacks Gaming industry’s 19.4% growth. Although shares of the company have underperformed the industry in the said period, growth in the number of locations and gaming terminals is likely to boost its prospects in the forthcoming quarters.
Image Source: Zacks Investment Research
As of Mar 31, 2024, the total number of locations and gaming terminals increased 5.1% year over year to 3,987 and 5.6% to 25,321, respectively. Also, its focus on the local gaming market and strategic acquisitions are encouraging.
The consensus estimate for AGS’s 2024 sales and earnings per share (EPS) suggests growth of 7.7% and 5,200%, respectively, from the year-ago levels.
American Public Education, Inc. (APEI - Free Report) currently carries a Zacks Rank #1. APEI has a trailing four-quarter earnings surprise of 138.2%, on average. The stock has surged 287.6% in the past year.
The Zacks Consensus Estimate for APEI’s 2024 sales and EPS indicates an increase of 3.9% and 124.6%, respectively, from year-ago levels.
Royal Caribbean Cruises Ltd. (RCL - Free Report) currently carries a Zacks Rank #2 (Buy). RCL has a trailing four-quarter earnings surprise of 18.3%, on average. The stock has rallied 69.8% in the past year.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS calls for growth of 16.9% and 64%, respectively, from the year-ago levels.
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Accel (ACEL) Expands Gaming Reach With Fairmount Acquisition
Accel Entertainment, Inc. (ACEL - Free Report) inked a deal to acquire Fairmount Holdings, Inc, the owner of FanDuel Sportsbook & Horse Racing. The acquisition is valued at approximately $35 million.
This strategic move boosts Accel's presence in the Collinsville, IL gaming market. This builds on its strong distributed, route-based platform with an advantaged, single-site local gaming asset. The acquisition includes the horse racing venue in greater St. Louis. ACEL will also gain an Organization Gaming License to offer casino gaming positions. The company will partner with FanDuel to participate in sports wagering in Illinois.
Accel expands its convenience gaming expertise with the addition of a single-site racetrack and a future casino project. The racetrack hosts 65 race days and approximately 435 horse races annually. The company is developing a legislatively authorized casino and holds a master sports betting license used in a revenue share agreement with FanDuel.
Preserving Fairmount’s horse racing legacy and supporting the Illinois Racing Board’s mission, the company aims to develop temporary and permanent casino facilities, improve the horse racing experience and enhance Fairmount’s food and beverage amenities.
Strategic Benefits of the Acquisition
Accel’s emphasizes scaling route-based gaming through organic growth and strategic acquisitions to drive growth. The acquisition of FanDuel Sportsbook & Horse Racing expands Accel’s capabilities to a single-site model, enhancing convenience for local customers.
The company plans to invest $85-$95 million in casino development and track enhancements, anticipating strong five-year Adjusted EBITDA and free cash flow conversion.
The acquisition positions Accel within the estimated $15 billion local gaming total addressable market (TAM), significantly expanding beyond its existing route-based TAM. Local gaming assets, predominantly under family or small business ownership, present opportunities less contested by larger gaming entities, offering a robust platform for future growth.
Price Performance
Shares of this Zacks Rank #3 (Hold) company have increased 5.7% in the past six months compared with the Zacks Gaming industry’s 19.4% growth. Although shares of the company have underperformed the industry in the said period, growth in the number of locations and gaming terminals is likely to boost its prospects in the forthcoming quarters.
Image Source: Zacks Investment Research
As of Mar 31, 2024, the total number of locations and gaming terminals increased 5.1% year over year to 3,987 and 5.6% to 25,321, respectively. Also, its focus on the local gaming market and strategic acquisitions are encouraging.
Key Picks
Some better-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
PlayAGS, Inc. (AGS - Free Report) sports a Zacks Rank #1 (Strong Buy). AGS has a trailing four-quarter earnings surprise of 33.3%, on average. The stock has appreciated 75.2% in the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.
The consensus estimate for AGS’s 2024 sales and earnings per share (EPS) suggests growth of 7.7% and 5,200%, respectively, from the year-ago levels.
American Public Education, Inc. (APEI - Free Report) currently carries a Zacks Rank #1. APEI has a trailing four-quarter earnings surprise of 138.2%, on average. The stock has surged 287.6% in the past year.
The Zacks Consensus Estimate for APEI’s 2024 sales and EPS indicates an increase of 3.9% and 124.6%, respectively, from year-ago levels.
Royal Caribbean Cruises Ltd. (RCL - Free Report) currently carries a Zacks Rank #2 (Buy). RCL has a trailing four-quarter earnings surprise of 18.3%, on average. The stock has rallied 69.8% in the past year.
The Zacks Consensus Estimate for RCL’s 2024 sales and EPS calls for growth of 16.9% and 64%, respectively, from the year-ago levels.