Century Inventory on Hearth, However Analyst Sees Extra Upside


Posted on: April 8, 2021, 12:16h. 

Final up to date on: April 8, 2021, 01:15h.

Century Casinos (NASDAQ:CNTY) inventory is up a scintillating 78 p.c year-to-date and 39.47 p.c over the previous month. But it surely’s not costly.

Century stock
The doorway of certainly one of two Century Casinos venues in Colorado, pictured right here. Wall Avenue likes the inventory. (Picture: Searching for Alpha)

That’s the view of Union Gaming analyst John DeCree, who reiterates a “purchase” score and $15 worth goal on the regional gaming firm. The analyst’s worth forecast implies upside of 32 p.c from the April 7 shut.

Despite the sharp restoration to begin the yr, we nonetheless see extra upside. CNTY remains to be one of many least expensive and most direct methods to play the reopening,” mentioned DeCree in a word to purchasers at present.

Colorado-based Century owns a pair of eponymous venues in its residence state and operates casinos in Missouri and West Virginia. The corporate additionally controls gaming venues in Canada and has a two-thirds curiosity in an entity often known as Casinos Poland Ltd.

Century Inventory: Margin Enlargement Story

By generally used metrics, Century is likely one of the smallest publicly traded US gaming operators. Its market capitalization is $306.38 million and it runs simply 4 home venues.

Regardless of that diminutive standing, Wall Avenue is broadly passionate about Century inventory. Analysts spotlight the title not solely as a reopening winner, however one slated to profit from margin growth. When the corporate delivered fourth-quarter outcomes final month, it famous first-quarter tendencies seem constructive, as extra gamblers within the 55+ age demographic get coronavirus vaccines and return to Century casinos.

Even with these good vibes and its latest stellar efficiency, Century inventory is cheap relative to friends and its personal historic norms.

Union Gaming’s DeCree says the shares commerce at 6x estimated 2022 earnings earlier than curiosity, taxes, depreciation and amortization (EBITDA). That compares with a historic vary of 6.5x to 7x. The analyst provides Century is cheaper than friends as a result of traders are assigning excessive multiples to operators with iGaming and on-line sports activities betting publicity — segments Century hasn’t closely penetrated as of but.

Coping with Headwinds

Century’s skill to reward traders this yr is spectacular, because it comes in opposition to a nonetheless difficult backdrop owing to the COVID-19 pandemic.

The operator’s properties in Canada are scheduled to stay closed till at the least subsequent week. That timeline could possibly be prolonged, because the Ontario provincial authorities earlier this week issued a brand new spherical of shelter-in-place directives.

Final month, Century introduced its Poland casinos will probably be closed till at the least April 9. These venues have been quickly shuttered and reopened solely to be closed once more a number of instances over the previous a number of months.

The operator is seeking to promote its stake in Casinos Poland, which accounted for only one p.c of its 2020 EBITDA.

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