On Monday, B.Riley maintained a Neutral rating on Everi Holdings (NYSE:EVRI) stock with a steady price target of $14.25.
The firm adjusted its earnings before interest, taxes, depreciation, and amortization (EBITDA) estimates for the company for 2024 and 2025.
The revised EBITDA projections are now set at $325.4 million for 2024 and $346.9 million for 2025, marking a decrease from the previous forecasts of $340.0 million and $366.4 million, respectively.
B.Riley's revision in EBITDA estimates reflects a cautious stance on the timeline for product transitions within Everi's games business. This conservative outlook is partly due to potential customer delays in purchasing platforms in anticipation of Everi's upcoming merger with the games division of International Game Technology (NYSE:IGT).
Despite the lowered EBITDA expectations, B.Riley predicts that the fourth quarter of 2024 will be a turning point for Everi, with positive year-over-year EBITDA growth anticipated. This growth is expected to be partly fueled by the company's entry into the Video Lottery Terminal (VLT) market.
Everi's shares are currently trading at approximately an 8% discount compared to the $14.25 per share acquisition agreement with private equity firm Apollo.
B.Riley indicates that no significant risks are foreseen that could affect the expected closure of the transaction in the third quarter of 2025, and thus, it has decided to maintain the Neutral rating.
In other recent news, Everi Holdings Inc. has experienced significant changes. The company's stock rating has been downgraded by Stifel from Buy to Hold, following the announcement of its acquisition by Apollo Global Management (NYSE:APO) for $14.25 per share. The acquisition is expected to provide a timely return for most shareholders, with Apollo having secured the necessary financing commitments.
Simultaneously, Everi Holdings has announced plans to merge with International Game Technology's Global Gaming and Play Digital businesses. This merger aims to enhance product offerings and expand market presence.
Following the acquisition announcement, Raymond James also adjusted the company's stock rating from a 'Strong Buy' to a 'Market Perform' status.
Everi's first-quarter results showed a decrease in its Games segment but growth in its Fintech cash access services. Adjusted EBITDA fell to $80.3 million from $92.5 million in the same quarter of the previous year.
However, the company anticipates revenue growth and a return to growth in Fintech revenues in the second half of 2024. These are among the recent developments for Everi Holdings.
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