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Caesars Entertainment (CZR) Down 8% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Caesars Entertainment (CZR - Free Report) . Shares have lost about 8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Caesars Entertainment due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Caesars Entertainment Reports Q3 Loss, Misses Revenue Estimates
Caesars Entertainment reported tepid third-quarter 2024 results, with earnings and revenues missing the Zacks Consensus Estimate and declining year over year.
The quarterly results reflect soft contributions from the Regional segment due to the adverse impact of new competition, construction disruption and difficult year-over-year comparisons. This, alongside tepid revenue contributions from the Managed and Branded and Las Vegas segments, added to the downtrend.
The headwinds were offset to some extent by growth in top-line contributions from the Caesars Digital segment.
Earnings & Revenue Discussion
Caesars Entertainment reported an adjusted loss per share of 4 cents, which missed the Zacks Consensus Estimate of earnings per share (EPS) of 21 cents by 119.1%. In the prior-year quarter, the company reported an adjusted EPS of 34 cents.
Net revenues of $2.87 billion also lagged the consensus mark of $2.91 billion by 1.3%. In the prior-year quarter, the company generated net revenues of $2.99 billion.
Segmental Performance of Caesars Entertainment
Las Vegas: Net revenues in this segment totaled $1.06 billion, down 1.3% from $1.12 billion reported in the year-ago quarter. The segment was hurt due to a decline in casino revenues due to the decrease in gaming volume associated with the divestiture of Rio at the end of the third quarter of 2023 coupled with lower table games hold.
The segment’s adjusted EBITDA was $472 million, down 2.1% from $482 million in the prior year quarter.
Regional: This segment’s quarterly net revenues were $1.45 billion, down 7.6% year over year. The segment experienced competition in new markets. It was hurt by competition associated with new casino resorts opening in some of Caesars Entertainment’s regional markets, construction disruption from renovation projects at few of its properties and inclement weather in several property locations during the first quarter of 2024.
The segment’s adjusted EBITDA reached $498 million, down from $575 million in the prior-year quarter.
Caesars Digital: This segment’s net revenues were $303 million, up 40.9% year over year from $215 million. The segment benefited from a significant increase in iGaming handle along with improved and higher hold in sports betting.
The segment’s adjusted EBITDA totaled $52 million, up from $2 million in the year-ago quarter.
Managed and Branded: Net revenues in this segment totaled $68 million, down 30.6% from $98 million in the prior-year quarter. The segment’s adjusted EBITDA was $19 million, down from $20 million in the prior-year quarter.
Corporate and Other: The segment’s net revenues were $(5) million compared with $(4) million in the prior-year period. This segment’s adjusted EBITDA totaled $(40) million compared with $(36) million in the year-ago quarter.
Balance Sheet of CZR
As of Sept. 30, 2024, Caesars Entertainment’s cash and cash equivalents were $802 million, down from $1.01 billion as of Dec. 31, 2023.
Net debt as of the end of the third quarter was $11.9 billion, up from $11.43 billion as of 2023 end.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -71.77% due to these changes.
VGM Scores
At this time, Caesars Entertainment has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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, Caesars Entertainment has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Caesars Entertainment (CZR) Down 8% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Caesars Entertainment (CZR - Free Report) . Shares have lost about 8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Caesars Entertainment due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Caesars Entertainment Reports Q3 Loss, Misses Revenue Estimates
Caesars Entertainment reported tepid third-quarter 2024 results, with earnings and revenues missing the Zacks Consensus Estimate and declining year over year.
The quarterly results reflect soft contributions from the Regional segment due to the adverse impact of new competition, construction disruption and difficult year-over-year comparisons. This, alongside tepid revenue contributions from the Managed and Branded and Las Vegas segments, added to the downtrend.
The headwinds were offset to some extent by growth in top-line contributions from the Caesars Digital segment.
Earnings & Revenue Discussion
Caesars Entertainment reported an adjusted loss per share of 4 cents, which missed the Zacks Consensus Estimate of earnings per share (EPS) of 21 cents by 119.1%. In the prior-year quarter, the company reported an adjusted EPS of 34 cents.
Net revenues of $2.87 billion also lagged the consensus mark of $2.91 billion by 1.3%. In the prior-year quarter, the company generated net revenues of $2.99 billion.
Segmental Performance of Caesars Entertainment
Las Vegas: Net revenues in this segment totaled $1.06 billion, down 1.3% from $1.12 billion reported in the year-ago quarter. The segment was hurt due to a decline in casino revenues due to the decrease in gaming volume associated with the divestiture of Rio at the end of the third quarter of 2023 coupled with lower table games hold.
The segment’s adjusted EBITDA was $472 million, down 2.1% from $482 million in the prior year quarter.
Regional: This segment’s quarterly net revenues were $1.45 billion, down 7.6% year over year. The segment experienced competition in new markets. It was hurt by competition associated with new casino resorts opening in some of Caesars Entertainment’s regional markets, construction disruption from renovation projects at few of its properties and inclement weather in several property locations during the first quarter of 2024.
The segment’s adjusted EBITDA reached $498 million, down from $575 million in the prior-year quarter.
Caesars Digital: This segment’s net revenues were $303 million, up 40.9% year over year from $215 million. The segment benefited from a significant increase in iGaming handle along with improved and higher hold in sports betting.
The segment’s adjusted EBITDA totaled $52 million, up from $2 million in the year-ago quarter.
Managed and Branded: Net revenues in this segment totaled $68 million, down 30.6% from $98 million in the prior-year quarter. The segment’s adjusted EBITDA was $19 million, down from $20 million in the prior-year quarter.
Corporate and Other: The segment’s net revenues were $(5) million compared with $(4) million in the prior-year period. This segment’s adjusted EBITDA totaled $(40) million compared with $(36) million in the year-ago quarter.
Balance Sheet of CZR
As of Sept. 30, 2024, Caesars Entertainment’s cash and cash equivalents were $802 million, down from $1.01 billion as of Dec. 31, 2023.
Net debt as of the end of the third quarter was $11.9 billion, up from $11.43 billion as of 2023 end.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -71.77% due to these changes.
VGM Scores
At this time, Caesars Entertainment has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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, Caesars Entertainment has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.