Last Update 08 Feb 26

FLL: Hold Downgrade Will Still Allow Upside From Discounted Risk Profile

Analysts have trimmed their price target on Full House Resorts to US$3, reflecting a more cautious stance that aligns with slightly adjusted margin and discount rate assumptions, as well as a recent downgrade to Hold.

Analyst Commentary

Bullish Takeaways

Bullish analysts see the US$3 price target as reflecting some degree of risk already accounted for in the valuation, which can limit downside if execution remains on track.
The move to a Hold rating can signal that, at current levels, the stock is closer to what analysts view as fair value rather than being materially overvalued.
Maintaining formal coverage with a specific target supports ongoing visibility for investors who track research driven valuation work.

Bearish Takeaways

The downgrade from Buy to Hold indicates reduced conviction in near term upside potential relative to prior views.
The US$3 target suggests analysts see limited scope for meaningful re rating without clearer evidence on margin improvement or project execution.
More cautious assumptions on margins and the discount rate point to higher perceived risk around future cash flows and capital allocation.
The shift in stance may signal that analysts now view the risk or reward balance as more neutral, which can temper enthusiasm for aggressive growth expectations.

Valuation Changes

Fair Value: Maintained at US$3.75 per share, with no change in the underlying estimate.
Discount Rate: Adjusted slightly from 12.5% to 12.33%, indicating a small refinement in the risk or return assumptions used in the model.
Revenue Growth: Held effectively steady at about 9.08%, with only a minimal numerical change in the input figure.
Net Profit Margin: Trimmed slightly from 8.09% to 8.01%, reflecting a modestly more cautious view on future profitability.
Future P/E: Ticked up from 6.11x to 6.14x, which points to a very small change in the earnings multiple applied to future results.

Strong property-level growth, operational improvements, and marketing innovation are driving revenue gains, improved margins, and increased customer engagement.
Legalization trends and broader market reach position the company for sustained long-term growth in gaming and hospitality.
Reliance on debt, operational inefficiencies, geographic concentration, shifting consumer preferences, and execution risks in new projects threaten growth, profitability, and financial stability.

Catalysts

About Full House Resorts

Owns, leases, operates, develops, manages, and invests in casinos, and related hospitality and entertainment facilities in the United States.What are the underlying business or industry changes driving this perspective?

The American Place property continues to ramp up with strong sequential revenue and EBITDA growth, driven by increased customer awareness, expansion of amenities (such as new dining concepts and a poker room), and a rapidly growing player database-setting up for further top-line growth and operating leverage as the property matures.
Chamonix's high-quality gaming and hotel product is filling an underserved market, and recent management upgrades, data-driven marketing initiatives, and sales team build-out (focusing on group/convention business) position both gaming and non-gaming revenues to accelerate as awareness grows and occupancy increases, improving both revenue and EBITDA margins.
The adoption of advanced digital marketing, AI-enabled database engagement, and a shift to more cost-efficient, targeted outreach (email vs. physical mail) are expected to drive higher ROI on marketing spend, improve customer retention, and support long-term margin expansion.
The ongoing legalization and geographic expansion of gaming (including expanded sports betting) across the U.S., coupled with rising consumer discretionary spend among younger demographics, expands Full House's addressable market and underpins sustainable long-term revenue growth.
Improved operational efficiency via cost control measures (labor optimization, unified casino cage system, outsourcing select services) is already yielding material annual savings and will continue to support better net margins and earnings as revenues scale across both new and legacy properties.

Full House Resorts Earnings and Revenue Growth

Full House Resorts Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Full House Resorts's revenue will grow by 8.8% annually over the next 3 years.
Analysts are not forecasting that Full House Resorts will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Full House Resorts's profit margin will increase from -13.7% to the average US Hospitality industry of 8.2% in 3 years.
If Full House Resorts's profit margin were to converge on the industry average, you could expect earnings to reach $31.5 million (and earnings per share of $0.85) by about September 2028, up from $-40.9 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 7.9x on those 2028 earnings, up from -3.1x today. This future PE is lower than the current PE for the US Hospitality industry at 24.0x.
Analysts expect the number of shares outstanding to grow by 1.43% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 12.32%, as per the Simply Wall St company report.

Full House Resorts Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Full House Resorts is highly reliant on favorable debt markets to finance its permanent American Place facility; fluctuations or tightening in high-yield and bond markets could delay construction, increase borrowing costs, and constrain future cash flows, putting pressure on net margins and earnings.
Chamonix has experienced significant ramp-up costs and operational inefficiencies, with only recent management changes leading to early cost savings; extended low midweek occupancy, delayed group/convention bookings, and slow market rebranding introduce the risk that revenue growth or EBITDA improvement may take longer to materialize than projected, negatively impacting return on invested capital.
Geographic concentration in a small number of regional markets leaves Full House exposed to local economic slowdowns, competitive pressures, and operational disruptions (e.g., Silver Slipper garage closure, rising competition in Indiana), which could undermine top-line revenue stability across its property portfolio.
Demographic and secular shifts toward online gaming, digital entertainment, and changing consumer preferences may limit growth at physical casino resorts over the long term, potentially reducing growth opportunities and on-site revenue streams, particularly among younger consumer cohorts.
Dependence on new developments and turnarounds (e.g., Chamonix and the permanent American Place) for future growth introduces execution risk; underperformance, delays, or regulatory setbacks in these projects could drag down overall EBITDA and earnings, limiting the company's ability to fund reinvestment, refinance debt, or achieve stable long-term profitability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $4.75 for Full House Resorts based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $5.0, and the most bearish reporting a price target of just $4.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $383.1 million, earnings will come to $31.5 million, and it would be trading on a PE ratio of 7.9x, assuming you use a discount rate of 12.3%.
Given the current share price of $3.55, the analyst price target of $4.75 is 25.3% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

American Place Expansion And Chamonix Upgrades Will Drive Sustainable Momentum