Jefferies: With Casino Stocks, Efficiency Is a Big Deal

With few exceptions, it’s been a tale of woe in 2026 for casino stocks, but investors scouring the landscape for rebound candidates may want to focus on a simple metric: efficiency.

Noting that “quality over quantity” matters and that operators dedicated to premium strategies “can justify premium valuations,” Jefferies analyst David Katz highlights the Las Vegas Strip as a prime example of a gaming jurisdiction where efficiency matters. He says that the U.S. casino hub is now more of “a hospitality and entertainment business supported by gaming rather than a pure casino model.”

Accounting for that, Wynn Resorts (NASDAQ: WYNN) may be appealing due to its well-documented emphasis on higher-end customers. Katz says Wynn is expected to generate $180,000 in earnings before interest, taxes, depreciation and amortization (EBITDA) this year per Las Vegas room. That’s well ahead of the estimated per room EBITDA of $83,000 for Caesars Entertainment (NASDAQ: CZR) and $77,000 for MGM Resorts International (NYSE: MGM).

MGM and Caesars are the two largest Strip operators with significantly more room stock than Wynn, but the Encore operator generates greater per room earnings than its two rivals.

Efficiency Matters With Regional Casino Stocks, Too

The themes of efficiency and quality as potential harbingers of casino stock upside aren’t confined to Strip operators. Those metrics are relevant with regional casino names, too, and as Katz points out, Monarch Casino & Resort (NASDAQ: MCRI) and Red Rock Resorts (NASDAQ: RRR) score well on those metrics.

The analyst highlights Monarch’s two-casino model and Red Rock’s dedication to the Las Vegas locals market as favorable traits.

There’s ample talk that Monarch could be a buyer of gaming assets that are on the market or some that will soon come up for sale, but the company is highly selective. It’s been rewarded for that approach because it’s one of this year’s best-performing casino stocks despite owning just two gaming venues.

It’s Not All About Scale

While sprawling portfolios may be nice from the perspective of geographic diversification, investors may be demanding more than sheer scale when evaluating gaming names – a scenario that’s likely amplified following the 2026 struggles by casino stocks.

“Operators generating the highest EBITDA per gaming position or EBITDA per room tend to benefit from differentiated assets, premium customer exposure, attractive market positions, and disciplined capital deployment,” adds Katz. “Ultimately, we believe future share performance is likely to be driven less by footprint expansion and more by management teams’ ability to increase earnings generated from existing rooms and gaming positions.”