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Century Casinos Inc.: Reopening Is A Positive, But Don't Roll The Dice For More Upside

Jun. 08, 2020 3:35 PM ETCentury Casinos, Inc. (CNTY)2 Comments


  • Century Casinos reported Q1 earnings in May impacted by temporary closures of worldwide properties amid the pandemic.
  • While the stock is still down in 2020, CNTY has rallied an incredible 510% from its low in March with a stabilizing outlook as its casinos are set to reopen.
  • We expect overall weak fundamentals, including negative earnings and a high debt position, to limit upside from current levels and also considering ongoing uncertainties.
  • This idea was discussed in more depth with members of my private investing community, Core-Satellite Dossier. Get started today »

Century Casinos Inc. (NYSE:NASDAQ:CNTY) reported Q1 earnings highlighted by the unprecedented disruption as the company was forced to temporarily close all properties amid the COVID-19 pandemic. While the stock traded with an extreme level of volatility in March, a stabilizing outlook has driven an impressive rally in shares that has gained momentum with reports of facilities on reopening. The company benefits from its small-market focus by catering to local residents. Management expects this segment of gaming can recovery faster compared to "destination" casinos that are more dependent on air-travel vacationers. Recognizing some positive developments, we take a cautious view on shares of CNTY considering ongoing social distancing rules that will continue to pressure the earnings outlook. We think the rally has run its course and the risks are now tilted to the downside.

(Source: finviz.com)

CNTY Q1 Earnings Recap

Century Casinos reported its Q1 earnings on May 20 with a non-GAAP EPS loss of $1.55 per share representing negative income of -$45.9 million. Revenue on the quarter at $87.7 million beat expectations by $2.4 million and was up $92% on a year-over-year basis.

The increase here is related to the company's acquisitions of three properties in December 2019 including "Mountaineer Casino, Racetrack & Resort", "Century Casino Cape Girardeau", and "Century Casino Caruthersville". Also, keep in mind that the casino closures from March 14 occurred at the tail end of the quarter while it was large business as usual in the period between January and February. Separately, the company also opened the Alberta, Canada "Century Mile Racetrack and Casino" property in April 2019 which contributed to the year-over-year sales gain.

(Source: Company IR)

Management noted that trends early in the quarter through mid-March were strong across various properties, up on a comparable basis compared to Q1 2019 prior to the closures. The operating

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This article was written by

Dan Victor, CFA profile picture

15 years of professional experience in capital markets and investment management at major financial institutions. 

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Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (2)

Dice away...!
Tracyroy1936 profile picture
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