Let’s dig into the relative performance of Accel Entertainment (NYSE:ACEL) and its peers as we unravel the now-completed Q3 gaming solutions earnings season.
Gaming solution companies operate in a dynamic and evolving market, and the digital transformation of the gaming industry presents significant opportunities for innovation and growth, whether it be immersive slot machine terminals or mobile sports betting. However, the gaming solution industry is not without its challenges. Regulatory compliance is a crucial consideration as companies must navigate a complex and often fragmented regulatory landscape across different jurisdictions. Changes in regulations can impact product offerings, operational practices, and market access, requiring companies to maintain flexibility and adaptability in their business strategies. Additionally, the competitive nature of the industry necessitates continuous investment in research and development to stay ahead of competitors and meet evolving consumer demands.
The 7 gaming solutions stocks we track reported a mixed Q3. As a group, revenues were in line with analysts’ consensus estimates.
Thankfully, share prices of the companies have been resilient as they are up 8.2% on average since the latest earnings results.
Accel Entertainment (NYSE:ACEL)
Established in Illinois, Accel Entertainment (NYSE:ACEL) is a provider of electronic gaming machines and interactive amusement terminals to bars and entertainment venues.
Accel Entertainment reported revenues of $302.2 million, up 5.1% year on year. This print exceeded analysts’ expectations by 1.7%. Overall, it was a satisfactory quarter for the company with a decent beat of analysts’ EPS estimates but a miss of analysts’ adjusted operating income estimates.
Accel CEO Andy Rubenstein commented, “I am happy to report that we delivered another strong quarter and are making substantial progress closing our acquisition of FanDuel Sportsbook & Horse Racing, a natural extension of our convenient, local gaming platform. We continue to outperform casinos in our largest market, Illinois, and posted significant revenue increases in our fastest growing market, Nebraska. By strengthening our core and expanding our offerings, we believe we can continue to generate attractive low-teens returns on capital and improve our trading multiples, making Accel a compelling investment opportunity.”
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $11.37.
Is now the time to buy Accel Entertainment? Access our full analysis of the earnings results here, it’s free.
Best Q3: Rush Street Interactive (NYSE:RSI)
Specializing in online casino gaming and sports betting, Rush Street Interactive (NYSE:RSI) is an operator of digital gaming platforms.
Rush Street Interactive reported revenues of $232.1 million, up 36.6% year on year, outperforming analysts’ expectations by 11.9%. The business had an incredible quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Rush Street Interactive achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 34.4% since reporting. It currently trades at $14.45.
Is now the time to buy Rush Street Interactive? Access our full analysis of the earnings results here, it’s free.
Slowest Q3: Inspired (NASDAQ:INSE)
Specializing in digital casino gaming, Inspired (NASDAQ:INSE) is a provider of gaming hardware, virtual sports platforms, and server-based gaming systems.
Inspired reported revenues of $78 million, down 20% year on year, falling short of analysts’ expectations by 3.8%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
Inspired delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 6.3% since the results and currently trades at $9.51.
Read our full analysis of Inspired’s results here.
PlayStudios (NASDAQ:MYPS)
Founded by a team of former gaming industry executives, PlayStudios (NASDAQ:MYPS) offers free-to-play digital casino games.
PlayStudios reported revenues of $71.23 million, down 6.1% year on year. This result came in 2.6% below analysts' expectations. Overall, it was a slower quarter as it also logged a miss of analysts’ daily active users estimates and a miss of analysts’ EPS estimates.
PlayStudios had the weakest full-year guidance update among its peers. The company reported 2.96 million monthly active users, down 78.4% year on year. The stock is up 42% since reporting and currently trades at $1.96.
Read our full, actionable report on PlayStudios here, it’s free.
Churchill Downs (NASDAQ:CHDN)
Famous for hosting the Kentucky Derby, Churchill Downs (NASDAQ:CHDN) operates a horse racing, online wagering, and gaming entertainment business in the United States.
Churchill Downs reported revenues of $628.5 million, up 9.8% year on year. This number met analysts’ expectations. More broadly, it was a slower quarter as it logged a miss of analysts’ EPS estimates.
The stock is down 6.7% since reporting and currently trades at $125.21.
Read our full, actionable report on Churchill Downs here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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