Everi Holdings Inc, the Las Vegas, Nevada-based supplier of cash handling technology and electronic game content for casinos, is forecasting two years of steady earnings growth.
At the company’s analyst day event in Chicago on Wednesday, Everi’s top brass said it forecast next year’s adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) at US$248 million, on revenue of US$493 million, and 2020’s EBITDA at US$265 million, on revenue of US$522 million.
Everi executives said growth in revenue, EBITDA and free cash flow has seen the company reduce debt while increasing investment in development of new products and technologies. The executives told their audience that the company had an unparalleled secure casino network, that it could innovate more than its competitors and that it was in the leading position to disrupt the industries it is in.
The company’s pitch to the financial community repeatedly mentioned the company’s “Fintech” credentials, reflecting the company’s shift into that sector in August. Fintech is an abbreviation for financial technology solutions.
Following Wednesday’s event, Telsey Advisory Group drew attention to an Everi review of its games business, saying the company executives talked about their portfolio of hardware and forthcoming additions to it.
The brokerage raised its price target for Everi stock to US$12 from US$10, now that its analysts have a clearer idea how the company is performing and are more confident that managers will hit their targets.
Telsey analysts Brian McGill and Alec Cummings wrote in a Thursday note that the new price target was a 27 percent increase from current levels, and based on the firm’s “expectation for continued improvement in equipment sector fundamentals (slot supply/demand) and a compelling valuation”.
Everi reported last month a net profit of US$1.5 million in the second quarter of this year on revenue of US$118.7 million, in contrast to the net loss of US$19.1 million it made a year earlier on revenue of US$102.1 million. Adjusted EBITDA were US$59.5 million – the most in any quarter yet.
Everi said its second-quarter growth was driven by continued improvement in all its businesses.
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"I am not going to speculate on what the [casino licence refreshment] tender requirements would be. I have full confidence and faith in the Macau government to treat everyone fairly"
Wilfred Wong Ying Wai
President and chief operating officer of Macau-based casino operator Sands China