On Monday, Century Casinos (NASDAQ:CNTY) saw its price target increased by Macquarie to $5.00, up from the previous $4.00, while the Outperform rating was maintained. The company's third-quarter results showed a 9% EBITDAR beat, attributed to strong performance in the United States and Poland. The analyst noted the successful opening of a new land-based property in Caruthersville, Missouri, on November 1, which marked an end to significant disruptions and set new records for coin-in and daily revenue on its first day.
Management at Century Casinos is optimistic about the future of the new Missouri property, anticipating a considerable rise in revenue, although they expect the impact on EBITDA to manifest over the next few quarters as the company addresses growing pains and optimizes staffing levels. The company also reported a sequential improvement at The Nugget, focusing on operational efficiencies to boost performance.
In addition to the promising developments in the U.S., Century Casinos has resumed operations in Poland, reopening its Wroclaw casino on October 24. Management is confident that this segment will quickly return to its normal annual EBITDAR levels of $10-12 million. The company observed overall stable customer trends, with retail and low-end customer segments remaining weak but stable, and rated play remaining flat.
The positive outlook for Century Casinos is supported by the company's strategic moves, including the opening of its new Missouri property and the reopening of the Polish casino, which are expected to contribute to its financial growth. The raised price target reflects the analyst's confidence in the company's trajectory following the reported earnings beat and operational progress.
In other recent news, Century Casinos reported a rise in net revenue by 7% to $146 million for the second quarter of 2024, despite facing several operational challenges. The company experienced a 6% decrease in adjusted EBITDAR due to factors such as construction disruptions, underperformance in Reno, and temporary closures in Poland. However, Century Casinos remains focused on operational efficiency and cash flow improvement to reduce debt and potentially repurchase stock.
The company expects the reopening of the Roslov casino in Poland and new construction in Caruthersville to positively impact future results. Despite struggles in the retail customer segment and lower-end database due to broader economic challenges, positive trends in revenue were noted in Cape Girardeau and the Canadian market.
InvestingPro Insights
Century Casinos' recent developments align with some intriguing financial metrics and insights from InvestingPro. The company's revenue growth of 27.26% over the last twelve months as of Q2 2024 reflects its expansion efforts, including the new Missouri property. This growth is complemented by a strong EBITDA of $102.04 million for the same period, underscoring the company's operational efficiency.
InvestingPro Tips highlight that Century Casinos has shown a strong return over the last month and three months, which correlates with the positive analyst outlook and the recent price target increase. However, it's worth noting that the company operates with a significant debt burden, which investors should consider alongside its growth initiatives.
For those seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Century Casinos, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.