Caesars Digital had another strong quarter. This is despite historically bad sports outcomes and a disastrous performance for the rest of the company.
Caesars announced recently that Caesar Entertainment’s only sector to showcase year-over-year growth in its first quarter earnings is the Sports betting and iGaming business.
Their stock opened a bit down on Wednesday compared to the close on Tuesday. It ended the week at $35.72, 10 cents off its pre-earning price.
For the first quarter, Caesars posted $2.74 billion in overall revenue, down 3.1% year-over-year and short 3% of Wall Street estimates. $853 million was the adjusted EBITDA for the quarter, down 10% year-over-year and short 6.9% of estimates.
In the bad weather this winter, unusually low table holds in Las Vegas. CEO Tom Reeg stated on the company’s earnings call that launching North Carolina sports betting resulted in more than $75 million of clearly one-time negatives for them in the quarter.
Reeg stated that they would view the biggest buckets, indicating that this quarter resembled a kitchen sink approach for them. Everything that could go wrong did for them.
For Q1, the segment that encompasses online sports betting and iGaming for Caesars posted $5 million adjusted EBITDA. This is the fourth straight quarter of positive EBITDA.
In comparison to the previous year, the segment incurred a loss of $4 million.
Caesars Digital also generated $282 million in revenue, marking an 18.5% increase year-over-year.
Barclays, Deutsche Bank, Macquarie, Stifel, and Truist Analysts all lowered their target prices for the stock. Some context says that digital’s momentum could soften the impact from the disastrous start by the end of the year.
Head of US research at Macquarie, Chad Beynon said in a note on the target price that they expect the story will remain driven by the company’s ability to improve Digital share and profits.
