Caesars Entertainment Inc (CZR, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $49.48, Caesars Entertainment Inc has witnessed a daily gain of 5.68%, marked against a three-month change of -8.67%. A thorough analysis, underlined by the GF Score, suggests that Caesars Entertainment Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 4/10
- Profitability rank: 8/10
- Growth rank: 10/10
- GF Value rank: 10/10
- Momentum rank: 10/10
Each one of these components is ranked and the ranks also have positive correlation with the long-term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high Growth, GF Value, and Momentum rank, and a moderate Profitability rank, GuruFocus assigned Caesars Entertainment Inc the GF Score of 92 out of 100, which signals the highest outperformance potential.
Understanding Caesars Entertainment Inc's Business
Caesars Entertainment Inc, with a market cap of $10.67 billion and sales of $11.52 billion, operates approximately 50 domestic gaming properties across Las Vegas, which accounts for 58% of its 2022 EBITDAR before corporate and digital expenses, and regional markets. The company's operating margin stands at 22.53%. Caesars Entertainment Inc's history dates back to 1973 with Eldorado's first casino in Reno, Nevada. The company's presence in the U.S. roughly doubled with the 2020 acquisition by Eldorado, which had expanded its presence through prior acquisitions to over 20 properties before merging with legacy Caesars. Its brand portfolio includes Caesars, Harrah's, Tropicana, Bally's, Isle, and Flamingo. Additionally, Caesars owns the U.S. portion of William Hill, a digital sports betting platform, after selling the international operation in 2022.
Profitability Rank Breakdown
The Profitability Rank reflects Caesars Entertainment Inc's impressive ability to generate profit relative to its peers. The company's Gross Margin has consistently risen over the past five years, with figures showing an increase from 49.01% in 2019 to 51.44% in 2021, before a slight dip to 46.92% in 2023. This trend highlights Caesars Entertainment Inc's growing efficiency in converting revenue into profit. Furthermore, the company's Predictability Rank of 4.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence in its financial stability.
Growth Rank Breakdown
Caesars Entertainment Inc's high Growth rank signifies its strong commitment to business expansion. The company's 3-Year Revenue Growth Rate of 16.5% outperforms 86.33% of companies in the Travel & Leisure industry. Additionally, Caesars Entertainment Inc has experienced a significant increase in EBITDA, with a three-year growth rate of 19.4 and a five-year rate of 27.9, emphasizing its sustained ability to drive growth and profitability.
Next Steps
Considering Caesars Entertainment Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. The company's strategic initiatives, competitive position, and management team further solidify its prospects for future success. As the industry evolves with technological advancements and regulatory changes, Caesars Entertainment Inc appears poised to capitalize on these trends and continue its trajectory of growth.
For value investors seeking similar investment opportunities, GuruFocus Premium members can explore companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
