Golden Could Be More Seller Than Buyer, Says Analyst

Posted on: April 24, 2025, 06:32h. 

Last updated on: April 24, 2025, 06:32h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Analyst speculates Strat operator could eventually sell itself
  • Says Golden could be appealing target for multiple suitors

Acknowledging that it’s just speculation, an analyst said Golden Entertainment (NASDAQ: GDEN) could eventually consider selling itself.

Golden Entertainment
Golden Entertainment’s Strat Las Vegas. An analyst said the operator could eventually consider selling itself. (Image: YouTube)

In a new report, Texas Capital Securities analyst David Bain said that over the long-term, the Strat operator may eschew boosting the size of its portfolio in favor of a sale. The company hasn’t said it’s interested in traversing that path, but if it does, Bain believes multiple bidders would emerge.

GDEN’s future may not include long-term ‘empire building,’ but rather clinically maximizing shareholder value in a sale of the company,” observes the analyst. “While purely speculative, GDEN’s portfolio offers multiple strategic opportunities for several potential buyers, in our view, and mergers and acquisitions multiples suggest significant share price upside.”

Following its $260 million sale of the Rocky Gap Casino Resort in Flintstone, Md. and the divestment of its distributed gaming operations in 2023, Golden is entirely focused on operating Nevada casinos in Las Vegas, Laughlin, and Pahrump. Its big footprint in Clark County, Nevada, which is growing 3.8x faster than the national average, according to Bain, could make the operator an appealing target.

Golden Previously Expressed Choosiness About Acquisitions

While Golden hasn’t publicly stated it would consider an outright sale of the company, management has made clear they’ll be selective regarding potential acquisitions.

“GDEN reviews potential strategic acquisitions, though currently favors continuing/augmenting return of capital policies given its view its own equity is underappreciated combined with elevated seller valuation expectations, in our view,” adds Bain.

That thesis jibes with comments made by Golden management earlier this year. On a conference call with analysts following the release of fourth-quarter results, Golden CFO Charles Protell said the company probably wouldn’t consider deals where it has to build new gaming venues from the ground up nor it would be a likely buyer of individual assets.

That implies that if Golden does go shopping, it be for multiple gaming venues in one transaction or another company, but management hasn’t signaled that either scenario is likely over the near-term.

Golden Real Estate in Focus

If there’s one rumor pertaining to Golden Entertainment that could have some traction, it’s the possibility of the operator selling some or all of its real estate as a way of unlocking shareholder value. The company has acknowledged that’s under consideration.

In terms of property value, The Strat is the crown jewel in the Golden portfolio. Located near the Las Vegas Strip, that venue could fetch a significant percentage of Golden’s $686.79 million market capitalization in a potential sale. Bain said sale-leasebacks could drive upside for the operator’s share price.

“GDEN owns its operational real estate and over 60 acres of excess land, including 9 Strip acres. In a sale leaseback transaction, we calculate land value exceeds $33 per share and earnings before interest, taxes, depreciation, and amortization (EBITDA) from operations would be worth another $8 per share,” concludes the analyst. “At no cost to GDEN, it could also partner with developers to generate unmodeled direct and indirect revenue on its excess land.”