BYD - Boyd Gaming: Despite Not Meeting Expectations Boyd Did Not Lose Its Fundamentals

2024-05-02 09:53:19 ET

Summary

• Challenges in Q1 2024: Decline in total revenue, especially gaming revenue, due to a challenging comparison base relative to Q1 2023.
• Impact of External Factors: Intensified competition in Las Vegas Locals, low demand in Downtown Las Vegas, along with adverse weather conditions in the Midwest and South segment, negatively affected revenues.
• Positive Outlook and Recovery Strategies: Despite the challenges, continued growth in the online segment and robust performance of key customers suggest a positive outlook. Boyd is implementing mitigation strategies, including.
• Online segment continues to grow rapidly: This segment grew by almost 20% and continues to generate rising revenues, despite tight margins.
• Impact on the current drop in the share price makes a possible upside quite attractive, especially for buy and hold investors.

Introduction

First of all, I would like to say that this analysis will focus exclusively on the operational aspects of Boyd Gaming ( BYD ), in particular how the company performed in the first quarter of 2024. If you guys want to read a more detailed analysis, specifying long-term trends and equity structure, I would recommend reading my latest analysis on Boyd, which you can find here .

In my last review I recommended "Buy" for Boyd Gaming. Together we unravel a company that has a strong balance sheet, which has been going through a constant deleveraging process since 2020 and still maintains returns of more than 30% to shareholders for three consecutive years, remunerating its shareholders through dividends (not very consistent, I have to give your arm) that grow at a pleasant rate and has a continuous share repurchase program (Boyd repurchased US$105 million in common shares during the first quarter of 2024 and still has double that earmarked for repurchases throughout the year)....

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