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Caesars Entertainment (CZR)
NASDAQ:CZR
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Caesars Entertainment
(NASDAQ:CZR)
62Neutral
Positive Factors
Corporate Governance
The addition of two new independent directors from Icahn Enterprises to the Board of Caesars Entertainment is seen as incrementally positive for the shares.
Digital Business
Caesars Digital continues to impress with EBITDA ahead of the Street's expectations.
Earnings
Caesars Entertainment reported Q1 earnings with Vegas and Regionals coming in ahead of expectations.
Negative Factors
Digital Segment
There is skepticism about the long-term growth of the digital segment, particularly in the sports betting area, which seems to be stalling.
Fourth Quarter Results
Fourth quarter results showed revenue and EBITDA below expectations, primarily due to weaker performance in the Vegas and Digital segments.
Recession Risk
A potential recession scenario could lead to net revenues being down 3-4% in Vegas/Regions, with more severe impacts in Vegas due to a higher-end mix and greater gambling options elsewhere.
Caesars Entertainment (CZR) vs. S&P 500 (SPY)
Market Cap
$6.38B
Dividend YieldN/A
Average Volume (3M)6.02M
Price to Earnings (P/E)―
Beta (1Y)1.79
Revenue Growth-1.25%
EPS Growth-130.83%
CountryUS
Employees50,000
SectorConsumer Cyclical
Sector Strength75
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)-0.42
Shares Outstanding207,968,120
10 Day Avg. Volume4,558,852
30 Day Avg. Volume6,019,210
Financial Highlights & Ratios
PEG Ratio-1.70
Price to Book (P/B)1.47
Price to Sales (P/S)0.00
P/FCF Ratio-102.27
Enterprise Value/Market Cap4.70
Enterprise Value/Revenue0.66
Enterprise Value/Gross Profit5.45
Enterprise Value/Ebitda2.02
Forecast
1Y Price Target
$42.00Price Target Upside42.04% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Caesars Entertainment Business Overview & Revenue Model
Company DescriptionCaesars Entertainment, Inc. operates as a gaming and hospitality company in the United States. The company operates casinos comprising poker, keno, and race and online sportsbooks; dining venues, bars, nightclubs, and lounges; hotels; and entertainment venues. It also provides staffing and management services; accessories, souvenirs, and decorative items through retail stores; and online sports betting and iGaming services. As of December 31,2021, the company owned, leased, and managed 52 domestic properties in 16 states, consisting of approximately 55,700 slot machines, video lottery terminals, and e-tables; 2,900 table games; and 47,700 hotel rooms. Caesars Entertainment, Inc. was founded in 1937 and is based in Reno, Nevada.
How the Company Makes MoneyCaesars Entertainment makes money primarily through its casino gaming operations, which include slot machines, table games, and sports betting. These activities are the largest contributors to its revenue. Additionally, Caesars generates income from hotel room bookings, food and beverage services, and entertainment events, such as concerts and shows held at its properties. The company also earns revenue from its loyalty program, Caesars Rewards, which encourages repeat visits and spending by offering customers points that can be redeemed for various services. Strategic partnerships, such as those with online gaming and sports betting platforms, further enhance its revenue streams by tapping into the growing digital market.
Caesars Entertainment Financial Statement Overview
Summary
Caesars Entertainment is showing signs of recovery and operational improvement, with stable revenue growth and improving cash flows. However, significant challenges remain, particularly in achieving profitability and managing high debt levels. The company's financial health hinges on sustaining revenue growth and reducing leverage to improve stability and resilience against market fluctuations.Income Statement
The income statement reflects a moderate recovery in revenue with a TTM revenue of $11.3 billion, slightly up from the prior year. However, net income remains negative, indicating profitability challenges. The gross profit margin has improved to 61.1% TTM, but the net profit margin is still negative due to operational and financial expenses. The EBIT and EBITDA margins are stable, suggesting operational efficiency is gradually improving.65
Positive
Balance Sheet
The balance sheet shows high leverage with a debt-to-equity ratio of approximately 5.86, indicating significant reliance on debt financing. The equity ratio is relatively low at around 13.2%, reflecting limited equity cushion. However, the company's return on equity is improving, albeit still negative, suggesting potential for financial improvement if debt levels are managed carefully.55
Neutral
Cash Flow
The cash flow statement shows a mixed picture. Operating cash flow is positive and growing, which is a good sign of core business strength. However, free cash flow is negative due to high capital expenditures, indicating ongoing investment needs. The operating cash flow to net income ratio is strong, showing good cash conversion, but the free cash flow to net income ratio remains negative, reflecting the impact of high capex.60
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 11.30B | 11.24B | 11.53B | 10.82B | 9.57B | 3.47B | Gross Profit |
| 5.52B | 5.83B | 6.13B | 5.42B | 4.92B | 1.71B | EBIT |
| 2.44B | 2.30B | 2.47B | 1.74B | 1.46B | 222.00M | EBITDA |
| 3.77B | 3.58B | 3.56B | 3.07B | 2.83B | 193.00M | Net Income Common Stockholders |
| -235.00M | -278.00M | 786.00M | -524.00M | -986.00M | -1.76B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 884.00M | 866.00M | 1.00B | 1.04B | 1.07B | 1.76B | Total Assets |
| 32.40B | 32.59B | 33.37B | 33.53B | 38.03B | 36.38B | Total Debt |
| 25.09B | 25.06B | 25.07B | 25.43B | 26.27B | 26.93B | Net Debt |
| 24.21B | 24.20B | 24.07B | 24.39B | 25.20B | 25.17B | Total Liabilities |
| 28.12B | 28.21B | 28.65B | 29.78B | 33.49B | 31.35B | Stockholders Equity |
| 4.05B | 4.38B | 4.55B | 3.71B | 4.48B | 5.02B |
| Cash Flow | Free Cash Flow | ||||
| -57.00M | -221.00M | 515.00M | 12.00M | 340.00M | -769.00M | Operating Cash Flow |
| 1.21B | 1.07B | 1.81B | 975.00M | 1.17B | -571.00M | Investing Cash Flow |
| -646.00M | -704.00M | -1.26B | -382.00M | -2.92B | -6.18B | Financing Cash Flow |
| -423.00M | -498.00M | -713.00M | -1.28B | -550.00M | 10.64B |
Caesars Entertainment Technical Analysis
Neutral
29.57
Price Trends
27.08
Positive
30.66
Negative
34.91
Negative
Market Momentum
0.88
Negative
57.44
Neutral
86.21
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CZR, the sentiment is Neutral. The current price of 29.57 is above the 20-day moving average (MA) of 28.32, above the 50-day MA of 27.08, and below the 200-day MA of 34.91, indicating a neutral trend. The MACD of 0.88 indicates Negative momentum. The RSI at 57.44 is Neutral, neither overbought nor oversold. The STOCH value of 86.21 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CZR.
Caesars Entertainment Risk Analysis
Caesars Entertainment disclosed 31 risk factors in its most recent earnings report. Caesars Entertainment reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Caesars Entertainment Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $6.08B | 12.40 | 35.62% | 0.91% | 6.06% | 10.05% | |
73 Outperform | $9.24B | 15.22 | 21.38% | ― | 2.76% | -14.31% | |
69 Neutral | $3.41B | 11.75 | 1.33% | 4.73% | -33.50% | 35.81% | |
68 Neutral | $4.93B | 20.72 | 81.59% | 2.12% | 9.48% | -11.92% | |
62 Neutral | $6.38B | ― | -5.56% | ― | -1.25% | -130.83% | |
61 Neutral | $6.97B | 11.38 | 2.88% | 3.90% | 2.64% | -22.07% | |
57 Neutral | $10.12B | 26.41 | -51.73% | 1.03% | -0.08% | -48.66% |
* Consumer Cyclical Sector Average
Performance Comparison
CZR
Caesars Entertainment
29.57
-5.37
-15.37%
BYD
Boyd Gaming
74.67
20.14
36.93%
IGT
International Game Technology
16.07
-3.42
-17.55%
MGM
MGM Resorts
33.67
-7.69
-18.59%
WYNN
Wynn Resorts
96.55
-0.01
-0.01%
RRR
Red Rock Resorts Inc
46.47
-2.73
-5.55%
Caesars Entertainment Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: 5.64%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call presented a generally positive outlook with strong digital and regional performance, despite some challenges such as weather disruptions and competitive pressures in certain markets. Las Vegas faced difficulties but managed to maintain strong margins. The company's digital segment showed impressive growth, particularly in iGaming.Q1-2025 Updates
Positive Updates
Revenue Growth
Consolidated net revenues of $2.8 billion increased 2% year-over-year.
Adjusted EBITDA Increase
Total adjusted EBITDA of $884 million increased 4% year-over-year.
Digital Segment Performance
Net revenue of $335 million was up $53 million or 19% year-over-year, with adjusted EBITDA up $38 million year-over-year.
Las Vegas EBITDA Margins
EBITDA margins in Las Vegas were 43.2%, up 50 basis points year-over-year.
iGaming Growth
iCasino net revenue grew 53% year-over-year, driven by 28% volume growth.
Regional Segment Improvement
Regional segment delivered $440 million of adjusted EBITDA, up 2% versus last year.
Negative Updates
Las Vegas Challenges
Las Vegas occupancy and cash ADR were both down slightly, and the segment faced tough comparisons against the Super Bowl last year.
Weather Disruptions
Weather disruptions negatively affected performance across the portfolio.
March Madness Impact
Digital segment faced poor hold during March Madness, impacting results.
International Visitor Decline
Notable reduction in Canadian visitation to Las Vegas.
Competitive Pressures in Regional Markets
Some regional markets faced competitive pressures impacting revenue and margins.
Company Guidance
During the Caesars Entertainment First Quarter 2025 Earnings Conference Call, the company provided guidance highlighting a solid start to the year with consolidated net revenues of $2.8 billion, a 2% increase year-over-year, and total adjusted EBITDA of $884 million, marking a 4% rise. Despite challenges like a tough Super Bowl comparison in Las Vegas, weather disruptions, and one less operating day, Caesars noted stable trends in brick-and-mortar and robust growth in digital operations. Las Vegas experienced a same-store adjusted EBITDAR of $433 million, maintaining its third-best Q1 performance, with EBITDA margins improving by 50 basis points to 43.2%. The regional segment reported a $440 million adjusted EBITDA, up 2%, supported by contributions from New Orleans and Danville. Digital revenues grew by 19% to $335 million, driven by sports betting and iCasino growth, with a notable hold-adjusted revenue increase of 31%. For the fiscal year, Caesars anticipates approximately $600 million in CapEx and a significant focus on debt reduction, while share repurchases remain opportunistic, as evidenced by a recent $100 million stock buyback.Caesars Entertainment Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Caesars Entertainment Enhances Board with Icahn Agreement
Positive
Mar 20, 2025
On March 17, 2025, Caesars Entertainment entered into an agreement with the Icahn Group, resulting in the appointment of Jesse Lynn and Ted Papapostolou as independent directors on its Board. This strategic move, effective immediately, aims to enhance shareholder value and explore strategic alternatives for Caesars’ digital business, while expanding the Board to 12 members. The agreement includes standstill and voting commitments from the Icahn Group, preventing them from acquiring significant ownership or engaging in proxy contests during the standstill period. This development reflects Caesars’ ongoing efforts to strengthen its governance and maximize shareholder value.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.