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Here's Why Investor Should Hold on to Caesars (CZR) Stock

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·4-min read
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  • CZR
  • HGV
  • CWH

Caesars Entertainment, Inc. CZR continues to benefit from solid performance of regional properties, robust occupancy and sports betting expansion. Consequently, the company’s shares have surged 27% so far this year, compared with the industry’s rally of 13.2%. However, coronavirus induced uncertainties remain a concern.

Growth Drivers

The company continues to witness encouraging trends for its regional destination properties. In the third quarter, the company reported encouraging revenues, adjusted EBITDA and margin performance. During the quarter, net revenues in the segment were $1,492 million compared with $1,055 million in the year-ago quarter. The segment’s adjusted EBITDA was $554 million compared with $350 million reported in the prior-year quarter.

The company continues to benefit from robust occupancy. During third-quarter 2021, occupancy in Las Vegas reached 89%, with weekend occupancy attaining 86%. The upside can primarily be attributed to pent-up demand and solid booking trends. Going forward, the company remains optimistic with respect to booking trends as it is witnessing increased bookings for group and convention room nights. Caesars Entertainment expects an uptrend in booking to sustain in 2022 and beyond. The company announced that while attrition remains higher than normal, it began witnessing return of conventions to Las Vegas in the third quarter, and the segment represented roughly 10% of occupied room nights. The momentum is likely to continue in 2022.

The Zacks Rank #3 (Hold) company continues to focus on partnerships to drive growth. The company has expanded its partnership with the Arizona Diamondbacks and Caesars Superdome. Meanwhile, the company emphasizes sports betting expansion. To this end, the company formed a new Caesars Digital segment comprising sports betting, iGaming and poker. Caesars Entertainment integrated its digital offerings with Caesars Rewards, at both online and physical casinos. As of Sep 30, 2021, the company operates sports betting in 20 jurisdictions, 14 of which are mobile. The company expects to complete the migration of its legacy up to Washington, D.C., Nevada, Pennsylvania, and Illinois to the Liberty platform in 2022.

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Concerns

The coronavirus pandemic negatively impacted the company’s business, financial condition and results of operations in the three months ended Sep 30, 2021. The impact of COVID-19 on its business remains uncertain.

Caesars Entertainment is subject to extensive regulation under laws, rules and supervisory procedures primarily in the jurisdictions where its facilities are located. If additional gaming regulations are adopted in its operating jurisdiction, such as imposition of restrictions or costs, it might adversely affect the company.

Key Picks

Some better-ranked stocks in the Consumer Discretionary sector include, Hilton Grand Vacations Inc. HGV, Bluegreen Vacations Holding Corporation BVH and Camping World Holdings, Inc. CWH.

Hilton Grand Vacations sports a Zacks Rank #1 (Strong Buy). The company has a trailing four-quarter earnings surprise of 411.1%, on average. Shares of the company have jumped 38% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Hilton Grand Vacations’ current financial year sales and earnings per share suggests growth of 41.2% and 161.4%, respectively, from the year-ago period.

Bluegreen Vacations flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 695%, on average. Shares of the company have surged 58.5% in the past three months.

The Zacks Consensus Estimate for Bluegreen Vacations current financial year sales and earnings per share indicates growth of 25.6% and 191.5%, respectively, from the year-ago period.

Camping World carries a Zacks Rank #2 (Buy). The company has been benefiting from the launch of a fresh peer-to-peer RV rental marketplace and a mobile service marketplace. It has been investing heavily in product development.

Camping World has a trailing four-quarter earnings surprise of 70.9%, on average. Shares of the company have appreciated 20.4% in the past three months. The Zacks Consensus Estimate for CWH’s current financial year sales and earnings per share suggests growth of 25.9% and 77.1%, respectively, from the year-ago period.


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Camping World (CWH) : Free Stock Analysis Report

Caesars Entertainment, Inc. (CZR) : Free Stock Analysis Report

Hilton Grand Vacations Inc. (HGV) : Free Stock Analysis Report

Bluegreen Vacations Holding Corporation (BVH) : Free Stock Analysis Report

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