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Caesars Entertainment Inc CZR

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Stock XNAS Rating as of
$36.27 −0.44 (1.20%)
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As of Delayed Price Closed
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Company Report

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Las Vegas Remains Near Full Hotel Occupancy, While Sports Betting Revenue Continues to Ramp

Dan Wasiolek

As a result of the acquisition of the legacy Caesars business by Eldorado (closed July 2020) and its leading omnichannel presence, we estimate Caesars holds around 10% revenue share of the $66 billion domestic commercial casino gaming market. The acquisition roughly doubled the company’s US portfolio to about 50 properties while lifting its loyalty membership to over 60 million from 55 million. Caesars has realized over $1 billion in combined sales and cost synergies from its merger with Eldorado, representing around a 30% increase to pro forma 2019 EBITDAR. Before this recent combination, legacy Eldorado successfully integrated the Isle and Tropicana acquisitions in 2017 and 2018, respectively, with both deals driving about a 30% return on investment, based on our calculation.

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Price vs Fair Value

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CZR is trading at a 200% premium.
Price
$36.71
Fair Value
$61.00
Uncertainty
High
1-Star Price
$722.39
5-Star Price
$53.20
Economic Moat
Llrmz
Capital Allocation
Fmvdycwsdx

Bulls Say, Bears Say

Bulls

Caesars' best-of-breed management has generated cost and revenue synergies from its merger with Eldorado.

Bears

Debt levels are elevated after the merger with Eldorado, which could elevate financing costs for future renovations and investment.

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Trading Information

Previous Close Price
$36.71
Day Range
$36.09–37.31
52-Week Range
$35.09–60.27
Bid/Ask
$36.30 / $36.55
Market Cap
$7.84 Bil
Volume/Avg
3.2 Mil / 3.5 Mil

Key Statistics

Price/Earnings (Normalized)
163.62
Price/Sales
0.69
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
0.84%

Company Profile

Caesars Entertainment includes about 50 domestic gaming properties across Las Vegas (49% of 2023 EBITDAR before corporate expenses) and regional (48%) markets. Additionally, the company hosts managed properties and digital assets, the later of which produced marginal EBITDA in 2023. Caesars' US presence roughly doubled with the 2020 acquisition by Eldorado, which built its first casino in Reno, Nevada, in 1973 and expanded its presence through prior acquisitions to over 20 properties before merging with legacy Caesars. Caesars' brands include Caesars, Harrah’s, Tropicana, Bally’s, Isle, and Flamingo. Also, the company owns the US portion of William Hill (it sold the international operation in 2022), a digital sports betting platform.
Sector
Consumer Cyclical
Industry
Resorts & Casinos
Stock Style Box
Small Value
Total Number of Employees
51,000
Website
https://www.caesars.com

Competitors

Valuation

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Metric
CZR
WYNN
MGM
Price/Earnings (Normalized)
 163.6218.0813.71
Price/Book Value
 1.80—3.79
Price/Sales
 0.691.570.86
Price/Cash Flow
 4.637.505.37
Price/Earnings
CZR
WYNN
MGM

Financial Strength

Metric
CZR
WYNN
MGM
Quick Ratio
 0.501.351.23
Current Ratio
 0.691.431.51
Interest Coverage
 0.991.413.66
Quick Ratio
CZR
WYNN
MGM

Profitability

Metric
CZR
WYNN
MGM
Return on Assets (Normalized)
 3.03%8.85%3.03%
Return on Equity (Normalized)
 23.22%—31.53%
Return on Invested Capital (Normalized)
 14.64%13.75%4.74%
Return on Assets
CZR
WYNN
MGM
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Resorts & Casinos Industry Comparables

Screen in Investor
Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
LVS
Las Vegas Sands CorpPdynljqvYqpmsky$34.4 Bil
SCHYF
Sands China Ltd Shs Unitary 144A/Reg S—Nthqcv$21.2 Bil
SCHYY
Sands China Ltd ADR—Xxtpnz$21.2 Bil
GXYEF
Galaxy Entertainment Group Ltd—Rykhjh$20.6 Bil
GXYYY
Galaxy Entertainment Group Ltd ADR—Mxfkb$20.6 Bil
MGM
MGM Resorts InternationalHrnvfghjVmcs$13.0 Bil
WYNN
Wynn Resorts LtdThfswdxyLmykt$11.0 Bil
MLCO
Melco Resorts and Entertainment Ltd ADRDzjjkmnqFglqt$3.6 Bil
PENN
PENN Entertainment IncHxstqxgpMym$2.4 Bil

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