{"id":204853,"date":"2022-03-11T08:01:34","date_gmt":"2022-03-11T16:01:34","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=204853"},"modified":"2022-03-11T10:53:22","modified_gmt":"2022-03-11T18:53:22","slug":"playags-tumbles-on-q4-loss-but-analyst-sees-positive-signs","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/playags-tumbles-on-q4-loss-but-analyst-sees-positive-signs\/","title":{"rendered":"PlayAGS Slides on Earnings Miss, Analyst Sees Brighter Days Ahead"},"content":{"rendered":"

Shares of gaming supplier PlayAGS (NYSE:AGS) are off 10% in early trading after the company’s fourth-quarter loss was wider than expected. But some analysts see reasons to be optimistic about the stock.<\/p>\n

\"PlayAGS\"
A slide from a PlayAGS earnings presentation. The stock is sliding today, but analysts remain bullish. (Image: Seeking Alpha<\/em>)<\/figcaption><\/figure>\n

The Las Vegas-based slot machine manufacturer said it lost 25 cents a share on sales of $70.22 million in the last three months of 2021. Wall Street expected a loss of eight cents on revenue of $69.08 million. PlayAGS pre-announced earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter in January<\/a>, so there weren’t surprises on that front.<\/p>\n

The stock is widely viewed as inexpensive, a condition likely to persist amid the drubbing it’s incurring in the early part of Friday’s trading session.<\/p>\n

We continue to believe AGS stock multiple does not reflect above. AGS trades for 5.7x\/4.6x CY22E\/CY23E EV\/EBITDA versus supplier peers at 9.5x\/8.5x. At supplier CY23E EV\/EBITDA averages, shares would trade at $24, over 200% higher than yesterday\u2019s (3\/10) close,\u201d<\/strong> said B. Riley analyst David Bain in a note to clients today.<\/p><\/blockquote>\n

He reiterates a \u201cbuy\u201d rating on PlayAGS, while trimming his price target to $18 from 21. The new forecast is still more than double where the stock closed on March 10.<\/p>\n

PlayAGS Sporting ‘Punitive’ Discount<\/h2>\n

The medium- to long-term PlayAGS investment thesis is likely to be supported by a brisk pace of new installations<\/a> and sales at regional and tribal casinos, as operators renew their focus on high-margin gaming opportunities.<\/p>\n

\n

For now, it’s a deeply discounted stock — something that’s often hard to come by in the small-cap space, and currently hard to find in the broader domestic equity landscape. While valuation alone isn’t a reason to buy or sell a stock, B. Riley’s Bain describes the discount PlayAGS is enduring relative to rivals as \u201cpunitive.\u201d<\/p>\n<\/div>\n

\u201cEven at 6x CY23 EV\/EBITDA, however, a ~30% discount to peers implies shares would trade at $14 or 75% higher,\u201d adds the analyst. \u201cWhile even a significant discounted valuation yields a large share price gain, we argue such discount is overly punitive, given company-specific trends\/share gains and its pure-play profile in a period of expanded casino buying.\u201d<\/p>\n

Enhancing the allure of the PlayAGS thesis<\/a> is the company’s recently completed debt financing, which saves $10 million in annual interest expenses, aiding in its quest to get to net leverage of 4x this year.<\/p>\n

Casino Particulars<\/h2>\n

The share of PlayAGS premium slots at casinos across the US doubled year-over-year in the fourth quarter. As Bain points out, the supplier is gaining more traction with commercial operators, adding diversification to what’s traditionally a tribal gaming-heavy customer base.<\/p>\n

Table game shufflers could also be a longer-ranging catalyst for the shares.<\/p>\n

\u201cWe continue to believe AGS’s second shuffler could prove significant, as now AGS offers a ‘line’ of shufflers across different table configurations, rather than one shuffler product,\u201d notes Bain. \u201cWe believe AGS is the only true alternative to a competitor\u2019s high-priced legal table shuffler ‘monopoly,’ and believe additional shuffler lines from AGS will be released over time.\u201d<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of gaming supplier PlayAGS (NYSE:AGS) are off 10% in early trading after the company’s fourth-quarter loss was wider than expected. But some analysts see reasons to be optimistic about the stock. The Las Vegas-based slot machine manufacturer said it lost 25 cents a share on sales of $70.22 million in the last three months […]<\/p>\n","protected":false},"author":46,"featured_media":204855,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,69293],"tags":[],"acf":[],"yoast_head":"\nPlayAGS Tumbles On Q4 Loss, But Analyst Sees Positive Signs<\/title>\n<meta name=\"description\" content=\"PlayAGS slides on Q4 EPS miss, but analyst views stock as too cheap.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/playags-tumbles-on-q4-loss-but-analyst-sees-positive-signs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"PlayAGS Tumbles On Q4 Loss, But Analyst Sees Positive Signs\" \/>\n<meta property=\"og:description\" content=\"PlayAGS slides on Q4 EPS miss, but analyst views stock as too cheap.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/playags-tumbles-on-q4-loss-but-analyst-sees-positive-signs\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2022-03-11T16:01:34+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-03-11T18:53:22+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/03\/ags2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"960\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/playags-tumbles-on-q4-loss-but-analyst-sees-positive-signs\/\",\"url\":\"https:\/\/www.casino.org\/news\/playags-tumbles-on-q4-loss-but-analyst-sees-positive-signs\/\",\"name\":\"PlayAGS Tumbles On Q4 Loss, But Analyst Sees Positive Signs\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/playags-tumbles-on-q4-loss-but-analyst-sees-positive-signs\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/playags-tumbles-on-q4-loss-but-analyst-sees-positive-signs\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/03\/ags2.jpg\",\"datePublished\":\"2022-03-11T16:01:34+00:00\",\"dateModified\":\"2022-03-11T18:53:22+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"PlayAGS slides on Q4 EPS miss, but analyst views stock as too cheap.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/playags-tumbles-on-q4-loss-but-analyst-sees-positive-signs\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/playags-tumbles-on-q4-loss-but-analyst-sees-positive-signs\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/playags-tumbles-on-q4-loss-but-analyst-sees-positive-signs\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/03\/ags2.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/03\/ags2.jpg\",\"width\":1280,\"height\":960,\"caption\":\"A slide from a PlayAGS earnings presentation. 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