Circa 70 percent or more of Everi Holdings Inc’s revenue, and of its earnings before interest, taxation, depreciation and amortisation (EBITDA), is via recurring business, rather than one-off deals, notes a Wednesday memo from brokerage B. Riley Securities Inc.
Everi, a casino equipment maker and financial technology (fintech) supplier, is also in a sector that has “historically proven mostly resilient to recessions and inflation,” added analyst David Bain.
Mr Bain made reference in his note to the current speculation in Everi’s home market, the United States, about the chances of an economic recession.
Commenting on the commercial casino segment in that country, and to Nevada’s main casino city, Mr Bain stated: “Las Vegas GGR [gross gaming revenue] has averaged over 7 percent growth from 1971 and declined five times, notably approximately 10 percent in both 2008 and 2009.”
In terms of Everi’s performance post the Covid-19 business recovery in the U.S., Mr Bain said Everi’s core markets are “more resilient,” and the company “has consistently gained gaming operations wallet share.” It had averaged a gain of 10.2 percent amongst publicly traded peers since first-quarter 2021, compared to 7.7 percent in 2019.
Its “game sales wallet share” had averaged a 10.8 percent gain since the first three months of 2021, he added.
Everi posted first-quarter 2022 net income of just over US$31.5 million, compared to a net profit of nearly US$20.5 million in the prior-year period.
In the data, issued in May, the company said it had booked the highest-ever revenue for a reporting first quarter, at US$175.6 million, up 26.2 percent year-on-year.
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George Choi and Ryan Cheung
Analysts at Citigroup