Is This Casino Stock a Smart Gamble After Earnings?

BALY has chart support in place amid today's pullback

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Bally's Corporation (NYSE:BALY) is a casino gaming and betting company based in Lincoln, Rhode Island. Bally's Corporation currently owns and manages 11 casinos across seven states, a horse racetrack, and 13 authorized off-track betting licenses in Colorado. The company has more than 5,900 employees and its operations include 13,260 slot machines, and 459 game tables and 2,941 hotel rooms. With properties still in development, Bally’s Corporation will own and manage 15 casinos across 11 states upon completion.

The casino operator recently submitted a proposal to develop a $650 million resort in Richmond, Virginia. Construction of this new location is expected to take approximately 18 months and the location is slated to open in 2024. The exciting news came just days before the company’s fourth-quarter earnings report, which occurred today before the open.

While earnings came in higher than expected, revenue missed forecasts, sending the stock down 5.6% to trade at $57.19. And despite the gap lower, the shares' 40-day moving average has stepped up as support, a trendline that hasn't been breached on a closing basis since Oct. 30. Beyond today though, Bally’s stock has seen an unexpected surge since bottoming at $7.22 per share about 12 months ago. BALY is currently up eight times that low. Year-to-date, the shares are up 14% but in the last 12 months boast a 129% tally.

BALY Stock Chart

From a fundamental point of view, Bally’s Corporation has endured the pandemic fairly well, despite the travel sector being the heavily impacted. However, BALY has still dropped revenues by roughly $125 million over the past 12 months, bringing its total revenues down to almost $400 million. Additionally, Bally’s Corporation's net income has taken dive into the red, with $12 million in net losses this past year. This marks a $77 million decrease in profits. The biggest redeeming factors for Bally’s Corporation are its minimal losses, considering the circumstances, and its decent growth rate prior to the COVID-19 outbreak. 

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