Boyd Gaming Falls 1.2% After-Hours Despite Beating Q3 Expectations

American gaming and hospitality company Boyd Gaming Corporation (BYD) delivered better-than-expected third-quarter revenue and earnings as property reopenings and guest visitations increased with the relaxation of COVID-19-related mandates. However, shares fell 1.2% in the extended trading session on October 26.

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The company reported adjusted earnings of $1.30 per share, up a whopping 242% year-over-year, and outpaced analyst estimates of $1.25 per share.

Additionally, revenue came in at $843.06 million, an increase of 29.3% compared to the prior-year period, and also surpassed Street estimates of $840.08 million.

What’s more, adjusted EBITDA further adjusted for rent expense associated with master leases with a real estate investment trust (EBITDAR) grew 42.6% compared to the prior-year quarter, including twenty-one of Boyd’s properties reporting double-digit EBITDAR growth year-over-year.

Further, the company’s board authorized a new share buyback program of $300 million, which will be added to $61 million remaining under the current program. (See Insiders’ Hot Stocks on TipRanks)

Commenting on the results, Keith Smith, President and CEO of BYD, said, “Continued growth in visitation and spending among our core customers, combined with our more efficient operating model, resulted in a third-quarter Companywide revenue record, EBITDAR growth of more than 42%, and a nearly 400-basis point improvement in operating margins.”

Smith concluded, “As the pandemic recedes, restrictions are lifted and additional guests return to our properties nationwide, we are confident in our ability to drive continued revenue and EBITDAR growth throughout our business.”

Impressed with Boyd’s solid financial performance, Deutsche Bank analyst Carlo Santarelli lifted the price target on the stock to $81 (21.6% upside potential) from $78 while maintaining a Buy rating.

Santarelli said, “We continue to see BYD as a compelling idea within regional gaming, and we believe its approach to sports betting and iCasino will prove prudent over the near to medium term. Exiting the 3Q21, we have raised our forecasts, with the bulk of the upward revisions stemming from the Las Vegas locals and Midwest & South regions.”

With 6 unanimous Buys, the stock commands a Strong Buy consensus rating. The average Boyd Gaming price target of $87.17 implies 30.9% upside potential to current levels. Shares have gained 105.9% over the past year.

Moreover, Boyd Gaming scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.