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Boyd Gaming Surges 18% in Three Months: How to Play the Stock?
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Boyd Gaming Corporation (BYD - Free Report) has staged an impressive comeback after a 2.4% decline in the past six months. In the past three months, its shares have surged 17.5%, significantly outpacing the industry’s modest 2.9% growth. BYD's strong rebound highlights the stock's resilience and growing investor confidence.
As of Tuesday, the stock closed at $64.06, below its 52-week high of $68.46 but above its 52-week low of $49.34. In the past three months, shares of other industry players like MGM Resorts International (MGM - Free Report) , Las Vegas Sands Corp. (LVS - Free Report) and Wynn Resorts, Limited (WYNN - Free Report) were down 12%, up 1.3% and down 4.5%, respectively.
Price Performance
Image Source: Zacks Investment Research
Technical indicators suggest continued strong performance for BYD. The stock is trading above its 50-day moving averages, signaling robust upward momentum and price stability. This technical strength underscores positive market sentiment and confidence in BYD's financial health and prospects.
50-Day Moving Averages
Image Source: Zacks Investment Research
Factors Favoring BYD Stock Surge
The company is benefiting from the increase in visitation. In the second quarter of 2024, BYD witnessed encouraging customer trends across its Las Vegas Locals business, showcasing sequential improvements. The Downtown Las Vegas segment performed well in the quarter thanks to the sequential increase in visitation. The recovered Hawaiian visitation as airfares normalized from the elevated levels in the previous quarter and improved pedestrian traffic in the downtown area aided. Also, the Midwest & South segment continued to boost the uptrend in the quarter.
Boyd Gaming continues to expand its portfolio by strengthening current operations and growing through capital investment as well as other strategic measures. The company extensively depends on acquisitions as a strategy to expand its brand presence. In the second quarter of 2024, the company announced the finalization of design work for Cadence Crossing Casino, a new property located in the Southeast portion of the Las Vegas Valley. It anticipates to commence the construction on this project in late 2024, with expected completion by early 2026.
The company is also benefiting from the increase in Online segment revenues. In the first six months of 2024, the Online segment generated $276.1 million in revenues, up 32.8% year over year. The uptrend was backed by FanDuel’s robust performance, along with an increase of $60.3 million in reimbursements of gaming taxes and other expenses paid on behalf of its online partners.
In the first six months of 2024, adjusted EBITDAR in the Online segment was $37.5 million, reflecting year-over-year growth of 10.3%. Owing to the improving trend witnessed in this segment, for 2024, Boyd Gaming increased its expectations for this segmental EBITDAR in the range of $65-$70 million from the previous guidance of $60-$65 million. The metric was $62.3 million in 2023.
What Could Weigh on BYD Stock?
Boyd Gaming, despite several efforts to boost margins, has been facing rising costs in areas like wages, utilities and property insurance. In the first six months of 2024, food & beverage, room, online as well as selling, general and administrative expenses increased year over year to $125.1 million, $38.1 million, $238.2 million and $213.3 million, respectively, from $118 million, $35.7 million, 173.4 million and 199.4 million. Total operating costs and expenses during the same time frame increased to $1.48 billion from $1.35 billion reported in the prior year.
Conclusion
This Zacks Rank #3 (Hold) company has experienced a strong resurgence in stock price performance in the past three months. The recovery was fueled by increased visitation and robust performance across its Las Vegas and Midwest & South segments. The company is also benefiting from a growing Online segment, reporting a 32.8% revenue increase and raising its EBITDAR forecast for 2024.
However, rising costs, particularly in wages, utilities and property insurance, remain a concern. While BYD's technical indicators point to continued momentum, cost pressures could weigh on its performance.
Image: Bigstock
Boyd Gaming Surges 18% in Three Months: How to Play the Stock?
Boyd Gaming Corporation (BYD - Free Report) has staged an impressive comeback after a 2.4% decline in the past six months. In the past three months, its shares have surged 17.5%, significantly outpacing the industry’s modest 2.9% growth. BYD's strong rebound highlights the stock's resilience and growing investor confidence.
As of Tuesday, the stock closed at $64.06, below its 52-week high of $68.46 but above its 52-week low of $49.34. In the past three months, shares of other industry players like MGM Resorts International (MGM - Free Report) , Las Vegas Sands Corp. (LVS - Free Report) and Wynn Resorts, Limited (WYNN - Free Report) were down 12%, up 1.3% and down 4.5%, respectively.
Price Performance
Image Source: Zacks Investment Research
Technical indicators suggest continued strong performance for BYD. The stock is trading above its 50-day moving averages, signaling robust upward momentum and price stability. This technical strength underscores positive market sentiment and confidence in BYD's financial health and prospects.
50-Day Moving Averages
Image Source: Zacks Investment Research
Factors Favoring BYD Stock Surge
The company is benefiting from the increase in visitation. In the second quarter of 2024, BYD witnessed encouraging customer trends across its Las Vegas Locals business, showcasing sequential improvements. The Downtown Las Vegas segment performed well in the quarter thanks to the sequential increase in visitation. The recovered Hawaiian visitation as airfares normalized from the elevated levels in the previous quarter and improved pedestrian traffic in the downtown area aided. Also, the Midwest & South segment continued to boost the uptrend in the quarter.
Boyd Gaming continues to expand its portfolio by strengthening current operations and growing through capital investment as well as other strategic measures. The company extensively depends on acquisitions as a strategy to expand its brand presence. In the second quarter of 2024, the company announced the finalization of design work for Cadence Crossing Casino, a new property located in the Southeast portion of the Las Vegas Valley. It anticipates to commence the construction on this project in late 2024, with expected completion by early 2026.
The company is also benefiting from the increase in Online segment revenues. In the first six months of 2024, the Online segment generated $276.1 million in revenues, up 32.8% year over year. The uptrend was backed by FanDuel’s robust performance, along with an increase of $60.3 million in reimbursements of gaming taxes and other expenses paid on behalf of its online partners.
In the first six months of 2024, adjusted EBITDAR in the Online segment was $37.5 million, reflecting year-over-year growth of 10.3%. Owing to the improving trend witnessed in this segment, for 2024, Boyd Gaming increased its expectations for this segmental EBITDAR in the range of $65-$70 million from the previous guidance of $60-$65 million. The metric was $62.3 million in 2023.
What Could Weigh on BYD Stock?
Boyd Gaming, despite several efforts to boost margins, has been facing rising costs in areas like wages, utilities and property insurance. In the first six months of 2024, food & beverage, room, online as well as selling, general and administrative expenses increased year over year to $125.1 million, $38.1 million, $238.2 million and $213.3 million, respectively, from $118 million, $35.7 million, 173.4 million and 199.4 million. Total operating costs and expenses during the same time frame increased to $1.48 billion from $1.35 billion reported in the prior year.
Conclusion
This Zacks Rank #3 (Hold) company has experienced a strong resurgence in stock price performance in the past three months. The recovery was fueled by increased visitation and robust performance across its Las Vegas and Midwest & South segments. The company is also benefiting from a growing Online segment, reporting a 32.8% revenue increase and raising its EBITDAR forecast for 2024.
However, rising costs, particularly in wages, utilities and property insurance, remain a concern. While BYD's technical indicators point to continued momentum, cost pressures could weigh on its performance.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.