Bally’s Stock Falters as Q4 Results Miss Estimates, International Digital Biz Disappoints
Bally’s Corp. (NYSE:BALY) gillyflower is slumping today after the gaming company’s fourth-quarter results drop shortsighted of Wall Street estimates due, inward large part, to a escape by the operator’s international interactive unit.
In the Oct through and through December period, the Rhode Island-based casino operator lost $1.87 a share on revenue of $547.7 million. Analysts expected earnings per divvy up of 67 cents on sales of $587.33 million. Bally’s international digital gaming business was 1 of the prime of life culprits behindhand the fourth-quarter weakness.
That’s meaningful because that unit is largely comprised of Gamesys, which Bally’s acquired finally twelvemonth for $2.7 one thousand million in its biggest acquisition to date. On a conference claim with analysts this morning, CEO Tsung Dao Lee Fenton said piece of the issue with the company’s international build up is a slow-moving regulatory reexamine currently underway inwards the UK.
Indeed, we really saw someone way out the market place earlier this week, and hand dorsum their license in the UK,” he said. “So we sense disappointed that the timeline keeps shifty out, but we’re expecting to see to it a lily-white paper inwards May and typically, then, that would live 90 days audience around that white-hot paper.”
Bally’s international digital operations posted familiarized earnings before interest, taxes, wear and tear and amortization (EBITDA) of $69.9 million inwards the final III months of 2021, a 17% quarter-over-quarter decline. The company’s North American interactive building block lost $8.6 billion on nett revenue of $18.6 million.
Outlook Doesn’t Boost Bally’s Stock
For this year, the gaming fellowship calculate revenue of $2.4 billion to $2.5 1000000000 on adjusted Earnings Before Interest Taxes Depreciation and Amortization of $560 zillion to $580 million. Coming into today, the consensus approximation for Bally’s 2022 revenue was $2.59 billion, indicating the society could misfire Wall Street forecasts.
There is some wiggle elbow room for Bally’s to surprisal to the upside this year because its fourth-quarter brick-and-mortar cassino results were hindered by forged weather condition inward some regions. Coronavirus mask mandates have got since been lifted inwards many areas. Should the operator go along bolstering margins, it could allay investors’ concerns on that front, while providing some upside for the stock.
“Management highlighted headwinds from COVID-19 and the ensuing block out mandates, as well as lumbering atmospheric condition impact during the quarter,” said Stifel psychoanalyst Jeffrey Stantial inward a promissory note to clients. “We expect these were clean intimately understood into the print, and anticipate investors to sharpen more on margin carrying into action during the billet and the outlook for sustainability into 2022.”
Stantial rates Bally’s a “buy” with a $58 terms target, implying an upside of about 71% from the Feb. 23 close.
Update on Standard General Takeover Bid
The bountiful number Bally’s is considering is a recent takeover offer from hedgerow fund Standard General, which is running game past Bally’s Chairman Soo Kim. Last month, the investment funds strong filed an acquisition bidding valuing the gaming company at $38 a share, or just now o'er $2 billion.
Earlier this month, the cassino operator formed a special commission to judge the proposal. Earlier this week, it maintained Macquarie Washington (USA) Inc. as its financial advisor and Potter Carl Anderson & Corroon LLP as its effectual counsel. Bally’s didn’t extend upwardly often commentary regarding the acquisition conjure on the send for with analysts.
“Those advisors demand to do that work on and confer with backrest with the special committee, and there’s no more exercise set timing that i cognise of or tin commit you now,” said President George II Papanier inward response to an psychoanalyst question.