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On Monday, JMP Securities maintained its Market Outperform rating on Century Casinos shares (NASDAQ:CNTY) with a set price target of $5.00. The firm highlighted Century Casinos' potential as an attractive merger or acquisition target in the near future, given the company's current valuation. With a market capitalization of $94.5 million and current trading price of $3.08, InvestingPro analysis suggests the stock is slightly undervalued based on its Fair Value model.
According to JMP Securities, Century Casinos is trading at a substantial discount, with shares valued at 4.1 times the estimated EBITDA for 2026. This valuation is significantly lower than the regional gaming sector's average, which trades at 7.4 times the estimated EBITDA for the same year. The company's last twelve months EBITDA stands at $101.68 million, though InvestingPro data reveals a significant debt burden with a debt-to-equity ratio of 17.96. Additionally, the firm pointed out that Century Casinos boasts a 34% discretionary free cash flow (FCF) yield based on Citizens JMP's estimates, compared to the sector's consensus of a 15% FCF yield.Want deeper insights? InvestingPro subscribers have access to 8 additional ProTips and comprehensive financial analysis for Century Casinos, including detailed valuation metrics and peer comparisons.
The analyst at JMP Securities expressed that there is an acknowledgment within the company regarding the benefits of scaling up, which may position Century Casinos as a potential candidate for a takeover or merger in the upcoming year. This perspective underscores the company's strategic value in the context of the broader gaming industry.
Century Casinos' stock performance reflects its undervaluation in comparison to peers, suggesting room for growth or corporate activity. The company's financial indicators, such as its EBITDA multiple and FCF yield, are central to JMP Securities' positive outlook on the stock.
Investors are keeping an eye on Century Casinos as the stock continues to trade on the NASDAQ, with the potential for strategic corporate developments influencing its future trajectory. While the stock has experienced a -18.09% return over the past year, its current ratio of 1.79 indicates sufficient liquidity to meet short-term obligations. The firm's reiteration of the Market Outperform rating and the $5.00 price target indicates confidence in the stock's prospects.
In other recent news, Century Casinos has had some noteworthy developments. The company reported a slight decrease in net revenue and adjusted EBITDAR in Q3 2024, with net revenue at $156 million, a 3% year-over-year decrease. Despite this, Century Casinos expressed optimism for future growth, primarily due to the reopening of their Polish casino and the launch of a new establishment in Missouri.
Stifel maintained its Buy rating on Century Casinos, citing the success of the Caruthersville expansion and stabilization of the Nugget casino's profit margins. JMP Securities upgraded the company's stock from a Market Perform to Market Outperform rating, following the completion of a major facility in Caruthersville.
These recent developments also include the company's consideration of stock buybacks, with an existing resolution allowing for $15 million in share repurchases. Additionally, interest in purchasing Century Casinos' non-core assets in Poland has seen a resurgence following the successful re-licensing process. These developments, among others, highlight the recent activities of Century Casinos.
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