Let’s dig into the relative performance of Accel Entertainment (NYSE:ACEL) and its peers as we unravel the now-completed Q2 gaming solutions earnings season.
Gaming solution companies operate in a dynamic and evolving market, and the digital transformation of the gaming industry presents significant opportunities for innovation and growth, whether it be immersive slot machine terminals or mobile sports betting. However, the gaming solution industry is not without its challenges. Regulatory compliance is a crucial consideration as companies must navigate a complex and often fragmented regulatory landscape across different jurisdictions. Changes in regulations can impact product offerings, operational practices, and market access, requiring companies to maintain flexibility and adaptability in their business strategies. Additionally, the competitive nature of the industry necessitates continuous investment in research and development to stay ahead of competitors and meet evolving consumer demands.
The 7 gaming solutions stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 2.2%.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Accel Entertainment (NYSE:ACEL)
Established in Illinois, Accel Entertainment (NYSE:ACEL) is a provider of electronic gaming machines and interactive amusement terminals to bars and entertainment venues.
Accel Entertainment reported revenues of $335.9 million, up 8.6% year on year. This print exceeded analysts’ expectations by 1%. Overall, it was a satisfactory quarter for the company with a beat of analysts’ EPS estimates but a miss of analysts’ adjusted operating income estimates.
Unsurprisingly, the stock is down 10.2% since reporting and currently trades at $11.13.
Is now the time to buy Accel Entertainment? Access our full analysis of the earnings results here, it’s free.
Best Q2: Rush Street Interactive (NYSE:RSI)
Specializing in online casino gaming and sports betting, Rush Street Interactive (NYSE:RSI) is an operator of digital gaming platforms.
Rush Street Interactive reported revenues of $269.2 million, up 22.2% year on year, outperforming analysts’ expectations by 7.6%. The business had a stunning quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Rush Street Interactive pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 32.7% since reporting. It currently trades at $21.28.
Is now the time to buy Rush Street Interactive? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Light & Wonder (NASDAQ:LNW)
With names as crazy as Ultimate Fire Link Power 4 for its products, Light & Wonder (NASDAQ:LNW) is a gaming company supplying the casino industry with slot machines, table games, and digital games.
Light & Wonder reported revenues of $809 million, down 1.1% year on year, falling short of analysts’ expectations by 4.4%. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates and a miss of analysts’ iGaming revenue estimates.
Light & Wonder delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 6.2% since the results and currently trades at $85.31.
Read our full analysis of Light & Wonder’s results here.
PlayStudios (NASDAQ:MYPS)
Founded by a team of former gaming industry executives, PlayStudios (NASDAQ:MYPS) offers free-to-play digital casino games.
PlayStudios reported revenues of $59.34 million, down 18.3% year on year. This number came in 2.8% below analysts' expectations. Aside from that, it was a mixed quarter as it also produced full-year revenue guidance beating analysts’ expectations but a miss of analysts’ daily active users estimates.
PlayStudios scored the highest full-year guidance raise but had the slowest revenue growth among its peers. The company reported 2.35 million monthly active users, down 27.1% year on year. The stock is down 14.3% since reporting and currently trades at $0.94.
Read our full, actionable report on PlayStudios here, it’s free.
DraftKings (NASDAQ:DKNG)
Getting its start in daily fantasy sports, DraftKings (NASDAQ:DKNG) is a digital sports entertainment and gaming company.
DraftKings reported revenues of $1.51 billion, up 36.9% year on year. This print beat analysts’ expectations by 5.9%. Overall, it was a strong quarter as it also logged a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EBITDA estimates.
DraftKings delivered the fastest revenue growth but had the weakest full-year guidance update among its peers. The company reported 3.3 million users, up 6.5% year on year. The stock is up 5.6% since reporting and currently trades at $47.90.
Read our full, actionable report on DraftKings here, it’s free.
Market Update
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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