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On Friday, Macquarie analyst Chad Beynon maintained a Neutral rating on Full House Resorts (NASDAQ:FLL), with a steady price target of $5.00. Beynon’s analysis highlighted that the company’s property EBITDA fell short of consensus expectations by 4%, but overall company EBITDA reached $10.4 million, marking a 42% increase year-over-year and surpassing consensus by 14% due to non-recurring items. According to InvestingPro data, the company’s last twelve months EBITDA stands at $37.1 million, though it operates with a significant debt burden of $527.6 million. Growth at American Place continued, with revenues and EBITDA rising by 27% and 72% year-over-year, respectively.
Following a favorable decision by Illinois courts, Full House Resorts’ management anticipates commencing permanent construction in 2025, with an aim to open by August 2027. The project, estimated to cost around $300 million, is expected to double the current revenues at American Place, while EBITDA could potentially triple, suggesting approximately $90 million of EBITDA.
In the Western region, Full House Resorts encountered higher costs at Chamonix in the fourth quarter, which were partly due to weather conditions following its grand opening in November. These expenses contributed to a $3 million year-over-year decline in segment EBITDA. However, management forecasts an increase in revenues at the property throughout the year, with costs anticipated to remain stable. The company has also brought on board experienced leadership in Colorado to facilitate this growth.
Despite the long-term investment thesis remaining intact, Beynon expressed caution regarding the pace at which Chamonix’s EBITDA will ramp up. He noted that while the investment narrative previously centered around Full House Resorts generating property EBITDA close to $100 million, current expectations for Chamonix have been tempered, and the legacy portfolio has not maintained margins. The company’s financial health metrics from InvestingPro support this cautious view, with a weak overall financial health score and current ratio of 0.87, indicating potential liquidity challenges. Subscribers can access 8 additional ProTips and detailed financial metrics to better understand FLL’s investment potential. Consequently, Macquarie has revised its 2025E EBITDA forecast for Full House Resorts to $63 million from $69 million. Nonetheless, the forecast anticipates growth to $76 million and $89 million in 2026 and 2027, respectively.
Full House Resorts will be participating in Macquarie’s Consumer Conference, which will take place on March 18-19 in New York City.
In other recent news, Full House Resorts reported a challenging fourth quarter for 2024, with earnings per share (EPS) of -$0.35, missing the forecasted -$0.23. Revenue also fell short of expectations, coming in at $72.96 million compared to the projected $75.78 million. Despite these misses, the company saw a 42% revenue increase at its American Place property for the year. Analyst Jordan Bender from Citizens JMP revised the price target for Full House Resorts to $5.00 from $6.00, maintaining a Market Outperform rating. Bender expressed confidence in the company’s long-term potential, noting the temporary casino’s significant contribution to EBITDA. Full House Resorts is focusing on expanding its Chamonix and American Place properties, with operational efficiency and margin improvement as key priorities. The company ended the previous year with a cash balance of $40 million and plans to reduce its debt and generate positive free cash flow. Looking ahead, the company aims to achieve an EBITDA of $10-15 million for Chamonix in 2025 and projects annual earnings of $50 million by 2030.
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