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Investing.com - Texas Capital Securities initiated coverage on Accel Entertainment (NYSE:ACEL) with a Buy rating and a price target of $17.00 on Wednesday. According to InvestingPro data, the company currently trades at $11.55, with analysts showing strong conviction as reflected in recent upward earnings revisions.
The firm described Accel Entertainment as an "underfollowed/underappreciated gaming operator" that combines visible free cash flow generation, growth potential, and an undemanding valuation. This assessment aligns with InvestingPro analysis, which indicates the stock is currently undervalued, with a market cap of $975 million and strong financial health metrics.
Texas Capital Securities noted that Accel’s "hyper-local, mostly variable-cost operations" position it to be better protected against economic downturns compared to most regional casinos.
The firm highlighted that Accel’s forward sales and EBITDA growth outpace the average for its peer group, yet the stock trades at approximately 30% or greater discount to regional gaming stocks on EV/EBITDA and FCF yield metrics.
Accel Entertainment operates as a distributed gaming operator, primarily placing slot machines and amusement devices in locations such as restaurants, bars, and convenience stores.
In other recent news, Accel Entertainment announced its Q2 2025 financial results, showcasing a mixed performance. The company reported a record quarterly revenue of $336 million, exceeding analyst expectations of $328.85 million. However, the earnings per share fell short of projections, coming in at $0.08 compared to the anticipated $0.21. These financial results highlight the company’s ability to generate higher-than-expected revenue while facing challenges in meeting earnings expectations. Investors and analysts are likely to scrutinize these figures as they assess Accel Entertainment’s financial health and future prospects.
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