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Investing.com - Macquarie has lowered its price target on Golden Entertainment (NASDAQ:GDEN) stock to $37.00 while maintaining an Outperform rating, citing mixed second-quarter results. The stock, currently trading at $25.12, appears undervalued according to InvestingPro analysis, despite falling nearly 16% over the past six months.
The casino operator reported second-quarter revenue of $163 million and EBITDA of $38.4 million, representing year-over-year declines of 2% and 7% respectively, and falling slightly below consensus estimates. Macquarie noted that when normalizing for low table performance in Laughlin, EBITDA would have exceeded consensus by 2%. InvestingPro data shows the company’s trailing twelve-month EBITDA stands at $133.6 million, with a robust gross profit margin of 54.2%.
Nevada Locals Casinos emerged as a bright spot with EBITDA growing 7% year-over-year, primarily driven by Las Vegas Locals, while EBITDA margin expanded 170 basis points to 46%. Management indicated these positive local trends continued into the third quarter and anticipates benefits from new tax legislation in 2026.
The STRAT property showed positive EBITDA in April and May but experienced a significant decline in June, with occupancy dropping to 60%, down 1,600 basis points year-over-year. Golden’s Tavern business faced promotional pressures, resulting in revenue and EBITDA declines of 7% and 25% respectively, though management noted stabilization in July.
During the second quarter, Golden Entertainment repurchased $15 million in shares and maintains a net leverage ratio of 2.4x with $225 million in additional liquidity, positioning the company for potential share repurchases or acquisitions according to Macquarie. InvestingPro subscribers can access additional insights about the company’s aggressive share buyback strategy and attractive 3.74% dividend yield. For comprehensive analysis of Golden Entertainment and 1,400+ other stocks, explore InvestingPro’s detailed research reports.
In other recent news, Golden Entertainment Inc. reported its second-quarter earnings for 2025, exceeding analysts’ expectations with an earnings per share (EPS) of $0.17, compared to the forecasted $0.16. Despite this positive earnings surprise of 6.25%, the company’s revenue slightly missed projections, coming in at $163.6 million against an anticipated $167.43 million. Analysts had predicted higher revenue, but the earnings beat indicates a strong performance in other aspects of the business. The company did not announce any mergers during this period. There were no recent analyst upgrades or downgrades reported for Golden Entertainment. These developments come as the company continues to navigate the financial landscape. Investors may keep an eye on future earnings reports for further insights.
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