Accel Entertainment Balance Sheet Lauded, Shares Undervalued, Says Analyst
Posted on: December 5, 2025, 12:19h.
Last updated on: December 5, 2025, 12:37h.
- Analyst initiates coverage of distributed gaming company with bullish views
- Price target implies upside of more than 20%
- Shares are undervalued, says analyst
Shares of distributed gaming company Accel Entertainment (NYSE: ACEL) are down slightly this year, but at least one analyst argues the stock is an undervalued, though catalyst-rich story.
In a new report to clients, Citizens analyst Jordan Bender initiated coverage of Accel with a “market outperform” rating and a $13 price target, implying upside of nearly 24% from current levels. Bender points out the stock’s current deep discounts to 2027 estimates, and its historical averages imply the investment community isn’t giving the company adequate credit for several positive attributes.
The discount to regional gaming and gaming suppliers suggests investors are unwilling to provide credit for its: 1) best-in-class balance sheet backed by recurring cash flows; 2) any return stemming from a casino at Fairmount Park (targeting 20% return); 3) video game terminals (VGT) in Chicago (~$5-6/per share) given budget headwinds; or 4) more distributed gaming legalization,” observes Bender.
The commentary around Accel’s Chicago and broader Illinois footprint is pertinent because the company is based there and the state accounts for nearly three-quarters of this year’s expected sales.
Accel Has Strong Balance Sheet, Devoted Customers
Accel’s business model is easy to understand. It distributes video gaming terminals (VGTs) in businesses such as restaurants, bars, taverns, convenience stores, liquor stores, truck stops, and grocery stores. That’s not “sexy” in broader gaming industry terms, but it has its advantages.
The company’s core customer is 55 years old or older, many of whom are retirees who are collecting pensions or Social Security, meaning they’re not dependent on jobs to fund discretionary spending. Bender points out that many of those customers live within 15 minutes of a venue that has Accel machines, “making it one of the most hyper-local, sticky customer bases across the gaming sector.”
As for Accel’s balance sheet, it’s one of the best in the distributed gaming segment, and the company could generate $1.36 in free cash flow per share next year.
“Overall, it has plenty of capacity to continue its buyback authorization, build a casino at Fairmount (2028 opening), and execute on mergers and acquisitions, whereby it has been the most active in the space over the last 10 years by number of transactions,” notes Bender.
Speaking of M&A…
Accel has a history of being acquisitive, and it added another chapter to that book earlier this week when it announced the purchase of the route operation assets of Dynasty Games. That deal paves the way for the buyer to increase its presence in Northern Nevada.
Accel’s acquisition plans and subsequent execution are important because growth in Illinois, its largest market, is moderating.
“Management is broadening its geographic and revenue exposure into other states, including Montana and Nevada, Nebraska, Louisiana, and Georgia. Currently, the company operates 28K slot machines, or gaming devices, across these states, making it the fourth largest slot operator in the United States,” concludes Bender.
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