Everi Holdings reported better-than-expected 4Q results on Tuesday despite challenges from the COVID-19 pandemic, including casino closures and capacity limitations at reopened casinos. Shares of the provider of financial equipment and services to casinos closed 3.4% higher in Tuesday’s extended trading session.
Everi’s (EVRI) 4Q earnings of $0.01 per share topped analysts’ expectations of a breakeven profit. Moreover, the bottom-line result compared favorably with a loss per share of $0.05 reported in the year-ago quarter.
4Q revenues of $119.6 million came in ahead of the consensus estimate of $115.8 million but declined 17.6% on a year-over-year basis. Weak top-line performance reflected an increased number of closed casinos and further capacity restrictions on reopened casinos in some jurisdictions. (See Everi stock analysis on TipRanks).
Despite the headwinds, the company reported sequential improvements across key metrics. Everi CEO, Michael Rumbolz, said, “The quarterly sequential increase in revenues, net income and Adjusted EBITDA achieved in the fourth quarter reflects the strength and balance of our businesses, in particular our significant percentage of higher-margin recurring revenues, and our track record of consistent operating execution.”
Following the earnings release, BTIG analyst Mark Palmer reiterated a Buy rating and price target of $21 (44.7% upside potential). In a note to investors, Palmer wrote, “We believe EVRI’s valuation should be supported by its consistent top- and bottom-line growth with strong adjusted EBITDA margins and more than 70% of its revenues of a historically recurring nature. At the same time, we view the stock as deserving of a premium multiple relative to gaming supplier peers as its leadership in high-growth FinTech products are a key differentiator.”
Overall, the rest of the Street has a bullish outlook on the stock, with a Strong Buy consensus rating based on 4 unanimous Buys. The average analyst price target of $19 implies upside potential of about 30.9% to current levels. Shares have gained about 99.3% over the past year.
Furthermore, EVRI scores a 9 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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