Caesars Entertainment, Inc. (CZR): A Bull Case Theory

We came across a bullish thesis on Caesars Entertainment, Inc. (CZR) on No Deep Dives’s Substack by jefke. In this article, we will summarize the bulls’ thesis on CZR. Caesars Entertainment, Inc. (CZR)’s share was trading at $32.07 as of Jan 13^th. CZR’s trailing and forward P/E were 11.30 and 27.40 respectively according to Yahoo Finance.

A bustling casino table surrounded by players, highlighting the gaming entertainment offered by the resort.

Caesars Entertainment (CZR), a major player in the casino and hospitality industry, is facing a volatile stock performance, currently trading at yearly lows despite improving fundamentals. The company stands out in the gaming sector due to its projected inflection in free cash flow generation for 2025-2026 and beyond, driven by a reduction in elevated capital expenditures (capex) and a growing digital segment that increasingly contributes to earnings. While management has signaled plans to initiate stock buybacks once leverage targets are met—expected around Q4 2024—they have already made a small buyback after monetizing a non-core asset. Despite these positive developments, the market has yet to be convinced, as the company’s results haven’t fully swayed investor sentiment. CZR remains a “show me” story, and the stock’s decline has influenced some investors’ perspectives. Though the underlying thesis for the stock remains intact, the market’s hesitation adds an element of uncertainty. This situation creates an interesting dynamic, where the downward movement of the stock price itself affects the investment outlook, even though it should not alter the long-term investment case. The stock’s current trajectory suggests that investor sentiment is still catching up with the company’s improving fundamentals and future growth potential.

Caesars Entertainment, Inc. (CZR) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held CZR at the end of the third quarter which was 54 in the previous quarter. While we acknowledge the risk and potential of CZR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CZR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.