As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the gaming solutions industry, including Light & Wonder (NASDAQ: LNW) and its peers.
Gaming solution companies operate in a dynamic and evolving market, and the digital transformation of the gaming industry presents significant opportunities for innovation and growth, whether it be immersive slot machine terminals or mobile sports betting. However, the gaming solution industry is not without its challenges. Regulatory compliance is a crucial consideration as companies must navigate a complex and often fragmented regulatory landscape across different jurisdictions. Changes in regulations can impact product offerings, operational practices, and market access, requiring companies to maintain flexibility and adaptability in their business strategies. Additionally, the competitive nature of the industry necessitates continuous investment in research and development to stay ahead of competitors and meet evolving consumer demands.
The 7 gaming solutions stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 2.2%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 11.7% since the latest earnings results.
Weakest Q2: Light & Wonder (NASDAQ: LNW)
With names as crazy as Ultimate Fire Link Power 4 for its products, Light & Wonder (NASDAQ: LNW) is a gaming company supplying the casino industry with slot machines, table games, and digital games.
Light & Wonder reported revenues of $809 million, down 1.1% year on year. This print fell short of analysts’ expectations by 4.4%. Overall, it was a softer quarter for the company.
Light & Wonder delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 11.1% since reporting and currently trades at $80.88.
Is now the time to buy Light & Wonder? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q2: Rush Street Interactive (NYSE: RSI)
Specializing in online casino gaming and sports betting, Rush Street Interactive (NYSE: RSI) is an operator of digital gaming platforms.
Rush Street Interactive reported revenues of $269.2 million, up 22.2% year on year, outperforming analysts’ expectations by 7.6%. The business had a stunning quarter with a beat of analysts’ EPS and EBITDA estimates.
Rush Street Interactive achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 16.7% since reporting. It currently trades at $18.72.
Is now the time to buy Rush Street Interactive? Access our full analysis of the earnings results here, it’s free for active Edge members.
Inspired (NASDAQ: INSE)
Specializing in digital casino gaming, Inspired (NASDAQ: INSE) is a provider of gaming hardware, virtual sports platforms, and server-based gaming systems.
Inspired reported revenues of $80.3 million, up 7.4% year on year, exceeding analysts’ expectations by 6.8%. Still, it was a slower quarter as it posted a significant miss of analysts’ adjusted operating income and EPS estimates.
As expected, the stock is down 6.2% since the results and currently trades at $8.27.
Read our full analysis of Inspired’s results here.
DraftKings (NASDAQ: DKNG)
Getting its start in daily fantasy sports, DraftKings (NASDAQ: DKNG) is a digital sports entertainment and gaming company.
DraftKings reported revenues of $1.51 billion, up 36.9% year on year. This number surpassed analysts’ expectations by 5.9%. Overall, it was a strong quarter as it also put up an impressive beat of analysts’ adjusted operating income estimates.
DraftKings scored the fastest revenue growth among its peers. The company reported 3.3 million users, up 6.5% year on year. The stock is down 28.5% since reporting and currently trades at $32.46.
Read our full, actionable report on DraftKings here, it’s free for active Edge members.
Accel Entertainment (NYSE: ACEL)
Established in Illinois, Accel Entertainment (NYSE: ACEL) is a provider of electronic gaming machines and interactive amusement terminals to bars and entertainment venues.
Accel Entertainment reported revenues of $335.9 million, up 8.6% year on year. This result beat analysts’ expectations by 1%. More broadly, it was a satisfactory quarter as it also recorded a beat of analysts’ EPS estimates but a miss of analysts’ adjusted operating income estimates.
The stock is down 19.3% since reporting and currently trades at $10.
Read our full, actionable report on Accel Entertainment here, it’s free for active Edge members.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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