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 slower Q3. As a group, revenues were in line with analysts’ consensus estimates.
While some gaming solutions stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.4% 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 $329.7 million, up 9.1% year on year. This print exceeded analysts’ expectations by 0.5%. Overall, it was a satisfactory quarter for the company with a beat of analysts’ EPS estimates but a miss of analysts’ adjusted operating income estimates.
Unsurprisingly, the stock is down 1.1% since reporting and currently trades at $9.82.
Is now the time to buy Accel Entertainment? Access our full analysis of the earnings results here, it’s free for active Edge members.
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 $277.9 million, up 19.7% year on year, outperforming analysts’ expectations by 4.3%. The business had a very strong quarter with a solid beat of analysts’ adjusted operating income estimates and a beat of analysts’ EPS estimates.
Rush Street Interactive scored the biggest analyst estimates beat and fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 4.8% since reporting. It currently trades at $17.30.
Is now the time to buy Rush Street Interactive? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: 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 $57.65 million, down 19.1% year on year, falling short of analysts’ expectations by 3%. It was a disappointing quarter as it posted a miss of analysts’ daily active users estimates and a significant miss of analysts’ adjusted operating income estimates.
PlayStudios delivered the slowest revenue growth in the group. The company reported 2.21 million monthly active users, down 25.3% year on year. As expected, the stock is down 36.2% since the results and currently trades at $0.58.
Read our full analysis of PlayStudios’s results here.
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 $683 million, up 8.7% year on year. This number beat analysts’ expectations by 1.2%. Taking a step back, it was a mixed quarter as it also produced a beat of analysts’ EPS estimates but a significant miss of analysts’ adjusted operating income estimates.
The stock is up 8.6% since reporting and currently trades at $104.51.
Read our full, actionable report on Churchill Downs here, it’s free for active Edge members.
DraftKings (NASDAQ:DKNG)
Getting its start in daily fantasy sports, DraftKings (NASDAQ:DKNG) is a digital sports entertainment and gaming company.
DraftKings reported revenues of $1.14 billion, up 4.4% year on year. This result lagged analysts' expectations by 5.6%. It was a softer quarter as it also logged full-year revenue guidance missing analysts’ expectations significantly and full-year EBITDA guidance missing analysts’ expectations significantly.
DraftKings scored the highest full-year guidance raise but had the weakest performance against analyst estimates among its peers. The stock is up 5.1% since reporting and currently trades at $29.49.
Read our full, actionable report on DraftKings here, it’s free for active Edge members.
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% in November), 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 potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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