Brokerage B.Riley Securities Inc has lowered its estimates for adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) at casino equipment maker and financial technology (fintech) supplier Everi Holdings Inc.
“We lower second-quarter 2024 Everi EBITDA from circa US$87 million to US$81.4 million, 4-percent below consensus estimates,” wrote analyst David Bain in a Monday memo.
He added: “Our second-quarter 2024 estimate changes reflect Everi’s early-stage product launch customer acceptance ramp, which may be slightly elongated due to its likely upcoming merger with IGT’s gaming business, relatively flat quarter-on-quarter slot industry trends, and no notable new openings or expansions in the period.”
In late July, it was announced that private equity firm Apollo Global Management Inc would simultaneously acquire Everi and casino equipment International Game Technology Plc (IGT).
Everi’s stockholders will receive US$14.25 per share in cash, representing a 56-percent premium over Everi’s closing share price on July 25. It is anticipated the deal will be closed by the end of the third quarter of 2025.
Everi’s adjusted EBITDA stood at US$80.3 million in the three months to March 31, down 13.2 percent from a year earlier. The firm reported first-quarter net income of US$4.6 million, on revenue that fell 5.6 percent year-on-year, to US$189.3 million.
In October, Everi said it would have a “full cabinet refresh” by early 2024, with the new cabinets debuting alongside the group’s “most diverse-ever portfolio of new content,” featuring more than 70 new themes across all product categories.
B.Riley Securities now expects Everi to report group-wide revenue of just below US$768.0 million for full-year 2024, down 4.9 percent from the prior year. Gaming revenue is likely to reach US$382.9 million this year, 10.8-percent lower than in 2023.
The brokerage estimates Everi’s 2024 adjusted EBITDA to decline 7.3 percent year-on-year, to US$340.0 million.
“We continue to anticipate fourth-quarter 2023 to be Everi’s inflection point for significantly positive year-on-year EBITDA growth,” stated Mr Bain.
“Longer-term, while we believe integration risks remain, intermediate and longer-term synergies between IGT and Everi may be under-appreciated by investors, and we believe Apollo will be a net benefit to a combined IGT/EVRI,” he added.
