Everi Brings 2021 Earnings Guidance Closer to Top End of Range

Posted on: October 5, 2021, 07:44h. 

Last updated on: October 5, 2021, 04:18h.

Everi Holdings (NYSE:EVRI) is tightening its 2021 earnings guidance. It’s now forecasting earnings before interest, taxes, depreciation and amortization (EBITDA) and net income that’s closer to the top end of previously estimated ranges.

Everi guidance
A sign for Everi, seen above. The company is tightening its 2021 earnings guidance. It expects EBITDA and net income to be closer to the high end of forecasts. (Image: Las Vegas Review-Journal)

The slot machine manufacturer said it now expects full-year net income will be $90 million to $95 million, and adjusted EBITDA will be $337 million to $342 million. The Las Vegas-based company previously forecast a 2021 net income of $87 million to $95 million and adjusted EBITDA of $332 million to $342 million.

The updated full year guidance demonstrates meaningful ongoing annual growth compared to 2020 and pre-pandemic 2019 results, even as the current COVID-19 pandemic environment persists,” said Everi in a statement.

Analysts are measuring gaming companies’ 2021 quarterly results against 2019 numbers. That’s because the severity of the 2020 coronavirus shutdown makes last year’s data unreasonable in comparison to this year’s numbers.

Cashless Gaming Boosts Stock

Everi previously issued bullish guidance for the second quarter, so some of the full-year projections are baked into the stock. As such, the shares are pointing lower in early trading Tuesday.

However, the provider of cashless gaming services is one of 2021’s best-performing gaming equities. With the help of a 14.4 percent gain over the past month, Everi stock is higher by 87 percent year-to-date, and analysts remain bullish on the name. The consensus price target on Everi is almost $31, about 24 percent above where the shares currently reside.

Everi is potentially appealing to investors because it’s a dual catalyst story. Its gaming device business is levered to the ongoing recovery in visitation levels at the Las Vegas Strip and regional and tribal casinos, while its fintech operation is tethered to the still-nascent move by operators to cashless gaming.

“We believe our cashless wallet technology creates new operational efficiencies with existing infrastructure across the entire casino ecosystem while providing casino guests with a convenient, end-to-end mobile funding experience,” said Darren Simmons, Everi fintech business leader, in the statement.

Fantastic Fintech Outlook

A major part of the Everi investment thesis is the company’s fintech offerings, and that’s underpinned by the move to cashless gaming at casinos across the country — one hastened by the coronavirus pandemic.

Some analysts believe the company is in advanced talks with gaming operators about rolling out cashless gaming solutions.

Everi already has some notable clients in that space. For example, Caesars Palace on the Strip is testing Everi’s Jackpot Xpress — a system used to track slot winnings and make submission of that data to the IRS more efficient.

Additionally, the company could have inroads into Florida by way of a previously existing relationship with the Seminole Tribe at the Hard Rock Casino in Indiana.