American Place Expansion And Chamonix Upgrades Will Drive Sustainable Momentum

Key Takeaways

• 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

Owns, leases, operates, develops, manages, and invests in casinos, and related hospitality and entertainment facilities in the United States.

• 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 Future Earnings and Revenue Growth

Assumptions

• 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

• 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

• 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.