On Thursday, Truist Securities made an adjustment to the price target of Golden Entertainment (NASDAQ:GDEN), reducing it to $40.00 from the previous target of $43.00. Despite the cut in the price target, the firm maintains a Buy rating on the stock.
The revision reflects concerns over the performance of The Strat, one of Golden Entertainment's key properties, which has been facing ongoing issues.
The analyst from Truist Securities noted that The Strat's challenges significantly impacted the company's second-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA), leading to a downward revision of approximately 5%.
The analyst's commentary pointed out that Atomic Golf, a new venture by Golden Entertainment, has not had a strong start, contributing to the difficulties the stock has faced recently. This has been a factor in the decision to adjust the price target.
Despite these short-term hurdles, Truist Securities still sees long-term value in Golden Entertainment's property, The Strat. The firm's stance suggests a belief in the potential for recovery and growth in the future.
Golden Entertainment's stock has been under pressure due to the aforementioned issues, but the maintained Buy rating indicates that Truist Securities remains optimistic about the company's prospects beyond the immediate challenges.
In other recent news, Golden Entertainment reported Q1 2024 financial results, posting revenues of $174 million and EBITDA of $41 million. The company has been divesting non-core businesses, enhancing its balance sheet, and focusing on growth opportunities. One of its key properties, the STRAT, saw increased occupancy, and the recent launch of Atomic Golf is expected to boost visitor numbers.
In addition to these developments, Golden Entertainment announced a change in its independent registered public accounting firm, appointing Deloitte & Touche LLP to replace Ernst & Young LLP. This decision followed a review process by the Audit Committee, concluding with the dismissal of EY and the appointment of Deloitte. Furthermore, Anthony A. Marnell III, a member of the company's Board of Directors, has resigned to pursue other opportunities.
InvestingPro Insights
As investors digest the latest assessment from Truist Securities on Golden Entertainment (NASDAQ:GDEN), real-time data from InvestingPro provides a broader financial perspective on the company. Golden Entertainment is currently trading at an attractive low earnings multiple with a P/E ratio of 3.31. This could signal a potential opportunity for investors looking for undervalued stocks. Additionally, despite analysts anticipating a sales decline in the current year, Golden Entertainment's liquid assets exceed its short-term obligations, showcasing a level of financial stability.
InvestingPro Tips suggest that while the company is expected to see a drop in net income this year, it remains profitable over the last twelve months, and analysts predict the company will maintain profitability within the year. Moreover, Golden Entertainment has delivered a strong return over the last five years, reinforcing its long-term value potential highlighted by Truist Securities.
To gain further insights into Golden Entertainment's financial health and stock performance, readers can explore additional tips on InvestingPro. There are 9 more tips available which could provide valuable guidance for those considering an investment in the company. For a deeper analysis, consider using the exclusive coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at https://www.investing.com/pro/GDEN.
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