Restrictions related to the COVID-19 pandemic have proven to be a major hurdle for the casino and gambling industry as physical casinos have been forced to remain closed. However, companies providing online gambling services have been able to generate significant returns. Along with growing demand for online gambling, the reopening of physical casinos with rapid vaccinations is expected to drive industry growth in the coming months. According to Research and Markets, the global online gambling market is expected to reach $112.09 billion in 2025, growing at a CAGR of 12%.
Additionally, New York Governor Kathy has included a plan to bring legal casino gambling to New York City. $216.3 billion budget proposal. In addition, the National Gaming Commission has recently launched legal app based sports betting across the Empire State. With the growing legalization of gambling across the country, many businesses operating in this space are well positioned to benefit.
Against this backdrop, Wall Street analysts expect gaming stocks Penn National Gaming, Inc. (PENN) and Bally’s Corporation (BALY) to increase by more than 70% over the next 12 months.
Penn National Gaming, Inc. (PENN)
PENN owns and operates 41 gaming and racing properties in 19 states and operates video game terminals. It operates through four segments: North East; South; Where is; and Midwest. It also owns various trademarks and service marks, including Ameristar, Argosy, Boomtown and Greektown.
On December 22, 2021, PENN launched Hollywood Casino Morgantown, the fourth gaming and entertainment facility in Pennsylvania. Todd George, PENN’s Executive Vice President of Operations, said, “This next-level technology, which is in place at our four Pennsylvania casinos, further supports our omnichannel business approach in which we deliver the best experiences people have. play at our properties or through our many online offerings.
PENN’s total revenue increased 33.8% year over year to $1.51 billion for the third quarter ended September 30, 2021. EBITDA increased 6% year over year to $364.30 million. Additionally, the Company’s cash and cash equivalents were $2.73 billion for the period ended September 30, 2021, compared to $1.85 billion for the period ended December 31, 2020.
Analysts expect PENN’s EPS to reach $0.54 for the three months ended December 31, 2021, representing a 671.4% year-over-year increase. The company’s revenue is expected to rise 29.3% year-over-year to $1.47 billion for the quarter ending March 31, 2022. Wall Street analysts expect the stock reaches $72.69 in the short term, indicating a 73.4% upside potential.
Bally’s Corporation (BALY)
BALY owns and operates gaming and racing facilities in the United States. Its gaming and racing facilities include slot machines and various casino table games, as well as restaurant and hotel facilities. It owns and operates 12 casinos comprising 13,308 slot machines, 460 gaming tables and 3,342 hotel rooms, as well as a racetrack in eight states.
On November 8, 2021, BALY announced that it had obtained one of nine licenses to conduct online sports betting in New York State. With New York’s premier professional sports franchises comprised of some of the most prestigious teams in all of sports, as well as a diverse base of dedicated sports fans, this license provides significant opportunities for BALY to showcase its best sport bets. and increase its player database.
BALY’s total revenue increased 169.9% year-over-year to $314.78 million for the third quarter ended September 30, 2021. Its adjusted EBITDA increased 105.3% from year over year to reach $77.98 million. Additionally, the company’s retail casino net income was $49.39 million, up 123.6% year-over-year.
For the quarter ending March 31, 2022, analysts expect ASX’s EPS and revenue to rise 256.7% and 226.4% year-over-year to 0.47 and $627.58 million, respectively. Wall Street analysts expect the stock to hit $59.86 in the near term, indicating a 103.9% upside potential.
PENN shares were trading at $40.92 per share on Friday afternoon, down $1.01 (-2.41%). Year-to-date, the PENN is down -21.08%, compared to a -7.79% rise in the benchmark S&P 500 over the same period.
About the Author: Nimesh Jaiswal
At Nimesh Jaiswal a fervent interest in the analysis and interpretation of financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving the price of a stock is the key approach he follows while advising investors in his articles. Following…