US stock futures edge lower after S&P 500 hits record high; PCE data in focus
On Monday, Macquarie maintained its Outperform rating on Century Casinos (NASDAQ:CNTY) but lowered the price target from $5.00 to $4.00. The adjustment follows Century Casinos’ first-quarter earnings, which fell short of expectations. The stock, currently trading at $1.46, has declined over 53% year-to-date, according to InvestingPro data. According to Macquarie, the company has missed consensus estimates in 11 of the last 14 quarters, with the latest results continuing the trend. Despite this, Macquarie sees potential upside due to slightly improving trends observed in March and April.
Century Casinos reported a miss in the first quarter, with revenue and EBITDAR not meeting the consensus by 7% and 6%, respectively. InvestingPro analysis reveals concerning financial metrics, including a significant debt burden representing 89% of total capital and rapid cash burn. Several factors negatively influenced the quarter, including adverse weather conditions, the absence of an additional leap day, and a shortfall in sports betting revenue in Colorado, which management estimated to be a $2 million EBITDAR headwind. The company also revised its 2025 forecast, now expecting EBITDAR to be approximately $110-120 million, down from previous projections.
The company experienced a challenging start to the year, with January and February’s EBITDAR figures falling below expectations due to the aforementioned factors. However, there was a turnaround in March, with an 8% year-over-year increase to $10.5 million, and April also showing positive momentum with an estimated 5% growth. Macquarie highlighted that trends among customers are mixed, with carded gaming revenues increasing by 1% while uncarded revenues declined by 2.5%. The firm noted that higher-end customers are outperforming those at the lower end.
Despite the repeated earnings misses and lowered forecasts, Macquarie’s stance remains optimistic, citing the stock’s potential operating leverage and performance. The firm acknowledged that their earlier upgrade in April 2024 was premature but believes that the current stock levels, combined with the improving trends, justify maintaining the Outperform rating. The revised $4.00 price target is a significant decrease from the stock’s two-year highs of approximately $8.00. According to InvestingPro’s Fair Value analysis, the stock appears fairly valued at current levels. Discover 10+ additional exclusive ProTips and comprehensive financial analysis in the Pro Research Report, available with an InvestingPro subscription.
In other recent news, Century Casinos Inc. reported a challenging first quarter of 2025, with both earnings and revenue missing analyst expectations. The company posted an earnings per share (EPS) of -0.67, which was below the forecasted -0.45, and revenue reached $130.4 million, falling short of the anticipated $141.59 million. Century Casinos has attributed these results to adverse weather conditions and a decrease in visitor volume, although they noted an increase in spend per trip. Despite these challenges, the company remains optimistic about its long-term prospects, with a focus on operational efficiency and cost-cutting measures expected to save $1 million annually. The company is also considering opportunistic stock buybacks and the potential sale of its Polish operations. Analysts from Stifel and Citizens Bank have shown interest in the company’s future strategies, particularly in the potential for sports betting partnerships and database sharing for online gaming in Alberta. Additionally, Century Casinos is not planning any significant capital expenditures for 2025, aiming to reduce its net debt to EBITDA ratio by the end of the year.
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