Earnings Beat: Monarch Casino & Resort, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a pretty great week for Monarch Casino & Resort, Inc. (NASDAQ:MCRI) shareholders, with its shares surging 13% to US$77.83 in the week since its latest quarterly results. Monarch Casino & Resort reported US$128m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.19 beat expectations, being 7.4% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Monarch Casino & Resort

Taking into account the latest results, Monarch Casino & Resort's four analysts currently expect revenues in 2024 to be US$512.8m, approximately in line with the last 12 months. Statutory per share are forecast to be US$4.62, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$512.0m and earnings per share (EPS) of US$4.47 in 2024. So the consensus seems to have become somewhat more optimistic on Monarch Casino & Resort's earnings potential following these results.

The consensus price target was unchanged at US$73.00, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Monarch Casino & Resort analyst has a price target of US$76.00 per share, while the most pessimistic values it at US$69.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Monarch Casino & Resort's revenue growth is expected to slow, with the forecast 0.7% annualised growth rate until the end of 2024 being well below the historical 21% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.7% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Monarch Casino & Resort.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Monarch Casino & Resort following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Monarch Casino & Resort's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$73.00, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Monarch Casino & Resort going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Monarch Casino & Resort .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com