Golden Entertainment (Nasdaq: GDEN) reports the lower sales to the estimates of analysts in the gains of the fourth quarter

Casino, tavern operator, Tavern and Machines with Golden Entertainment (Nasdaq: GDEN) has dropped market income expectations in the fourth quarter CY2024, sales down 28.8% over a year to 164.2 million dollars. Its GAAP profit of $ 0.10 per share was 50.3% lower than the consensual estimates of analysts.

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• Income: $ 164.2 million against analysts’ estimates of $ 168.3 million (28.8% of annual sliding drop, 2.4% Miss)

• EPS (GAAP): $ 0.10 compared to analysts’ expectations of $ 0.20 (50.3% Miss)

• Adjusted Ebitda: $ 39.18 million against analysts’ estimates of $ 38.83 million (23.9%margin, 0.9%beat)

• Operational margin: 7.1%, against 3.1% in the same quarter last year

• Market capitalization: $ 861.5 million

Blake Sartini, president and chief executive officer of Golden, said: “Our performance of the fourth quarter has improved sequentially during the third quarter and we plan that the commercial conditions will continue to improve in 2025. For 2025, we remain focused on investment in our own assets, the capital back to shareholders and the continuation of potential strategic opportunities.”

Founded in 2001, Golden Entertainment (NASDAQ: GDEN) is a games company in operating casinos, taverns and distributed game platforms.

Casino operators benefit from limited competition because the game is a highly regulated industry. These companies can also take advantage of healthy margins and benefits. Have you ever heard the expression “the house still wins”? However, the regulations cut in both directions and casinos can face a risk of a boost which suddenly limits what they can or cannot do and where they can do it. In addition, digitization changes the game, the pun. Whether online poker or sports betting on your smartphone, innovation obliges these players to adapt to changing consumer preferences, such as being able to bet anywhere on demand.

The long -term sales performance of a company is a signal of its overall quality. Even a bad business can shine for one or two quarters, but a high level level grows for years. Golden Entertainment has struggled to generate demand regularly in the past five years, its sales have dropped at an annual rate of 7.3%. It was not an excellent result and it is a difficult starting point for our analysis.

Long -term growth is the most important, but in the discretion of consumers, product cycles are short and income can be focused on rapidly changing consumer trends and preferences. The recent history of Golden Entertainment shows that his request has remained abolished because his revenues have decreased by 22.9% per year in the past two years. Note that Covid injured Golden Entertainment’s business in 2020 and a part of 2021, and he rebounded considerably.

History continues

We can better understand the dynamics of the company’s income by analyzing its most important segment, the game. In the past two years, Golden Entertainment Games income (Poker, Blackjack) reached an average of 30.1% in annual shift. This segment has lagged behind the overall sales of the company.

This quarter, Golden Entertainment missed the estimates of Wall Street and declared a drop in income of 28.8% in annual sliding, generating $ 164.2 million in revenues.

For the future, sales analysts expect income to increase 2.6% over the next 12 months. Although this projection implies that its more recent products and services stimulate better high level performance, it is still below the average of the sector.

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If you have followed Stockstory for a while, you know that we are focusing on available cash flows. Why do you ask? We think that in the end, the money is king, and you cannot use the accounting benefits to pay the bills.

Golden Entertainment has shown poor cash profitability over the past two years, giving the company limited opportunities to return capital to shareholders. Its margin of cash flow available was on average 3.9%, ugly for a discretionary consumption company. The divergence of its good exploitation margin comes from its high -intensity of capital, which requires Golden entertainment to make major cash investments in working and capital funds.

We were impressed by the way in which Golden Entertainment has significantly suffered the expectations of analysts ‘analysts’ income this quarter. On the other hand, his EPS has missed significantly and his total income did not reach the estimates of Wall Street. Overall, this quarter could have been better. The action remained stable at $ 30.83 immediately after reports.

Should you buy the stock or not? What happened during the last quarter is important, but not as much as the quality and evaluation of the company in the longer term, when they decide to invest in this stock. We cover this in our usable search report that you can read here, it’s free.