Bally’s Posts Surprise 4Q Profit But Misses On Revenues; Shares Drop 6%

Bally’s Corp. swung to a surprise profit in the fourth quarter topping analysts’ expectations but lagged sales estimates. Shares of the gaming and racing facilities owner fell almost 6% in Thursday’s late morning trading.

Bally’s (BALY) reported 4Q adjusted earnings of $0.39 per share, down 7.1% year-over-year. Analysts had expected the company to report a loss of $0.08 per share.

Revenue of $118.1 million missed the Street’s estimates of $123.43 million and decreased 9.4% from the year-ago period. Various state restrictions due to the coronavirus pandemic negatively impacted quarterly revenues, the company said.

Adjusted EBITDA came in at $21.1 million in the quarter, down 47.6% year-over-year. (See Bally’s stock analysis on TipRanks)

Bally’s CEO George Papanier commented, “Without question, the highlights of the fourth quarter were our pending acquisition of Bet.Works, which will drive development of our interactive offerings, as well as our strategic media partnership with Sinclair Broadcast Group, which we expect will make Bally’s a common name in sports fans’ households across the U.S.”

On Feb. 24, Truist Financial analyst Barry Jonas increased the stock’s price target to $80 (32% upside potential) from $65 and maintained a Buy rating. The analyst “sees the stock as a sports betting value play” and believes that “its COVID headwinds will shortly shift to vaccine tailwinds.”

“Bally’s imminent full-scale launch of its brand across media, digital and physical platforms should narrow the interactive discount of the stock relative to other sports betting players,” Jonas added.

Bally’s shares have exploded 141% over the past year, while the stock still scores a Strong Buy consensus rating based on 4 Buys and 1 Hold. That’s alongside an average analyst price target of $71.20, which implies upside potential of about 17.5% to current levels.