2. Caesars Entertainment, Inc. (NASDAQ:CZR)
Number of Hedge Fund Holders: 54
Although Caesars Entertainment, Inc. (NASDAQ:CZR) is best known for its Caesars Palace casino in Las Vegas, it currently runs more than 50 casinos around the country following its acquisition by Eldorado, which adopted Caesars name. Following that, the company bought William Hill, a British gambling company pushing it into the US online sportsbook industry. It changed the name of William Hill’s operations to Caesars Sportsbook.
The company has been using nationwide advertising to promote its online sportsbook aggressively, which has helped it capture a double-digit market share. However, it also resulted in large losses for the company, especially after facing big setbacks from the pandemic, leading management to adopt a more tactical and focused approach to future ad campaigns as additional states legalize sports betting.
The digital division of Caesars Entertainment, which offers sports betting, experienced a positive adjusted EBITDA of $5 million in Q1 2024 and an 18.5% year-over-year gain in revenue to $282 million, turning around a previous loss.
CZR now provides sports betting in 32 North American jurisdictions, 26 of which allow wagering on mobile devices.
In Q2 2024 earnings Eric Hession President, Caesars Sports and Online Gaming stated:
“Net revenues in our sports betting segment increased 19% year-over-year, driven by flat handle and hold of 7.2% which improved 80 basis points versus last year. Our product on the sports side continues to improve and our customers are reacting positively to our increasing mix of parlay and in-game offerings. We continue to drive growth in our parlay wagers with the percentage of that type of wager growing 380 basis points year-over-year, consistent with the trends we’ve observed throughout the year.
In July, we closed on the acquisition of ZeroFlucs a leading sports betting technology company based in Australia. ZeroFlucs team has already started contributing to the product innovation and driving hold improvements and customer engagement. In our eye gaming segment net revenues grew 50% for the second consecutive quarter driven by a 33% increase in volume and a 30 basis point year-over-year improvement in hold. Caesars Palace Online continues to grow as a percentage of our total iCasino revenues. We’re actively enhancing the product offerings by adding new and exciting game content including exclusively designed Caesars Themed Games.
We successfully completed the acquisition of WynnBet’s operations in Michigan in June, which sets the stage for the introduction of our new iGaming app, which will be branded the Horseshoe in early Q3. As we head to the back half of the year, we continue to be optimistic about the progress we’re making in both sports and iCasino and I believe we are well set up for a strong finish to the year”.
Daniel Politzer, an analyst at Wells Fargo, raised his recommendation on Caesars Entertainment, Inc. (NASDAQ:CZR) Entertainment to Buy with a $56.00 price target, noting the company’s outstanding Q2 financial results, anticipated rise in EBITDAR, and potential asset sales. The company’s strong free cash flow and consistent growth are apparent in the positive forecast.
It is the Best Sports Betting Stocks to Buy Now and 13 analysts have collectively rated the stock as a “Buy.” The average price objective of $53 indicates a possible gain of 42.63% from the current stock price of $37.16.
Parag Vora’s HG Vora Capital Management is the shareholder in the company, with 3,300,000 shares worth $131.14 million.
