Is Boyd Gaming Stock Attractive After A Meteoric Rise?

by Trefis Team
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The shares of Boyd Gaming (NYSE: BYD) have gained 78% in the past quarter supported by broader momentum in sports betting and the iGaming industry. By acquiring a 5% stake in FanDuel, Boyd Gaming entered into a strategic agreement to develop its sports betting application, B Connected, in 2018. In exchange, FanDuel sports book will gain market access in states where Boyd has a gaming license. While Boyd does not report the sports betting handle, but the stock has potential to gain more due to the ongoing rally in all sports betting stocks. We highlight the historical trends in Boyd Gaming’s revenues, earnings, and stock price in an interactive dashboard analysis, Why Boyd Gaming Stock Has Gained 72% In A Year?

Pandemic took a toll on Boyd Gaming’s fundamentals

Boyd Gaming’s revenues fell by 38% (y-o-y) for the first nine months of 2020, impacted by state-induced lockdowns and a slump in discretionary spending. However, the stock breached its pre-Covid level in the past quarter as broader momentum was observed in the sports betting industry. Interestingly, the shares of Penn National Gaming, Boyd’s immediate competitor, have skyrocketed due to the popularity of its sports betting application Barstool. In our earlier analysis, we highlighted that at a 15% expected market share, Penn stock’s market capitalization has increased by 340% from $3.8 billion to $17 billion in the past twelve months. Thus, Boyd’s 78% gain in the past-quarter indicates more room for growth.

Overview of Sports Betting Industry

After the Supreme Court overturned the Professional and Amateur Sports Protection Act (“PASPA”) in 2018, the sports betting and iGaming industry went live in 25 states. Currently, Nevada, New Jersey, and Pennsylvania account for almost 75% of the sports betting handle. At maturity, the sports betting & iGaming industry is likely to reach $40 billion in the U.S. and $70 billion globally. Thus, multiple sports betting applications, including FanDuel, bet365, Hardrock Café, BetMGM, and William Hill, are eyeing a sizable share of the pie.

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