Shaun Currie, CFA
Long/short equity, hedge fund analyst, momentum

Multimedia Games: Possible Near-Term Downside Headed Into Quarterly Earnings

After reviewing International Game Technology's (NYSE:IGT) earnings call this week, I believe that Multimedia Games (NASDAQ:MGAM) could be setting up for a weak earnings report next week, which could result in lower guidance for 2014. During the IGT call, most of the weakness came from the US slot business, where there was pressure on average selling prices ((ASPs)) along with guidance that the replacement market would remain weak. This market represents basically 100% of MGAM's exposure. Additionally, US regional gaming, the area where most of MGAM's business is focused, is forecasted by analysts to be slower in 2014 than 2013 as less new capacity comes online. Even with these considerations, MGAM is forecasting better sequential unit...

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