Everi Stock could get a boost from several fintech, slot machines installations
Posted on: 22 August 2022, 02:46h.
Last updated: 22 August 2022, at 02:49.
Shares of Everi Holdings (NYSE:EVRI) are trailing the broader stock market on Monday, but one analyst sees reasons to be bullish on the gaming provider.
In a note to clients today, B. Riley analyst David Bain reiterated a “buy” rating on Everi stock with a $35 price target. That means an upside of almost 75% from the close on 19 August. The analyst’s positive comments about Everi come after a recent meeting with CFO Mark Labay and Senior Vice President of Investor Relations Bill Pfund.
Management noted broad casino strength observed by withdrawal activity in its market share-leading fintech business. Year-over-year casino withdrawal volumes accelerated in July from June and are trending higher in August than in July,” Bain wrote.
A significant driver of the Everi investment charge is the company’s fintech offering, and that is underpinned by the move to cashless gaming in casinos across the country – one accelerated by the coronavirus pandemic.
Investigating Everi Stock Upside Potential
Although down 4.45% year-to-date, Everi is one of the best gaming stocks in 2022, and it’s in the midst of an impressive rally of late, down almost 32% in July.
Not only is Everi’s mission supported by strong casino visitation trends, which could lengthen the upgrade cycle for domestic slots, these factors provide ballast for the company’s burgeoning fintech business.
While Everi’s fintech story is an increasingly prominent part of the equity statement, it is also still in its early stages. The company’s gaming unit business is leveraged to the ongoing uptick in visitor levels at the Las Vegas Strip and regional and tribal casinos, while its fintech operations are tied to operators’ ever-increasing move to cashless gaming.
“Management noted continued strength in mechanical reel gaming and additional, recent strength in the video segment, a larger category with faster turnover than reels. Video success is underpinned by the Empire Flex cabinet, and management cited upcoming new video cabinet offerings at October’s G2E gaming show in Las Vegas,” Bain added.
Everi pleasant surprises possible
On the back of Sky River, a California tribal casino managed by Boyd Gaming, which recently embraced Everi’s fintech suite, Bain lifted its 2023 sales estimate for the company’s fintech arm by 3%.
“EVRI said it is in the process of going live with digital fintech in an additional 20 casinos compared to 19 at the end of 2Q22,” he said in the report. “We believe Sky River could be a top 10% GGR generating North American casino. Furthermore, Boyd is not an EVRI corporate customer, which signals at least a potential willingness by Boyd to consider EVRI as its full fintech provider in the longer term , in our view.”
It remains to be seen if the Boyd/Everi relationship expands in the future, but it will undoubtedly be compelling for the gaming provider because Boyd is one of the largest regional operators in the country and has a dominant presence in the local Las Vegas market.
