A Fresh Look at Boyd Gaming (BYD) Valuation After Strong Results and FanDuel Stake Sale Plans

If you’ve been watching Boyd Gaming (BYD) lately, there’s been plenty to talk about. The company’s latest quarterly update came in above what was expected, with revenue and earnings outpacing forecasts. Even more interesting, Boyd Gaming is moving to sell its stake in FanDuel. This represents a strategic pivot to shore up its financial standing and free up capital for fresh growth bets. These moves have gotten the attention of investors weighing whether it’s time to make a play in the gaming sector.

It’s not just this quarter’s results that have people talking. Over the past year, Boyd Gaming’s stock has posted a 33% return, and shares are up nearly 20% since the start of the year, hinting at building momentum. While other operators like Red Rock Resorts and Wynn have seen mixed fortunes recently, Boyd’s results, its push into digital, and a strong cash flow story stand out against a backdrop of expanding operations and new property openings on the horizon.

After such a solid run, is Boyd Gaming still trading at a discount, or has the market already priced in the company’s next stage of growth?

Most Popular Narrative: 5.3% Undervalued

According to the widely followed analyst narrative, Boyd Gaming’s shares are seen as trading below their fair value, with a current discount of 5.3%. This view is based on the latest consensus among analysts who have considered future earnings, profit margins, and sector risks to estimate Boyd's worth.

Sale of Boyd’s 5% stake in FanDuel at a strong, highly accretive valuation provides a substantial cash influx. This cash is expected to be primarily used for debt reduction, resulting in significant annual interest expense savings and further strengthening the balance sheet.

Curious what’s fueling this bullish narrative? A few bold financial bets and some rapidly shifting profit assumptions are behind the math. Want to peek at the single most important shift analysts believe will drive up fair value and change the company’s outlook? Take a closer look at the narrative’s quantitative engine to see what could power Boyd Gaming’s re-rating.

Result: Fair Value of $90.77 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, competitive pressures and economic uncertainty could limit Boyd Gaming’s growth or compress margins. This makes the bullish narrative vulnerable if trends shift.

Find out about the key risks to this Boyd Gaming narrative.

Another View: Discounted Cash Flow Perspective

A different lens is our DCF model, which suggests Boyd Gaming is still trading below its fair value. This approach considers future cash flows and offers a reality check on market optimism. Could consensus be missing something?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Boyd Gaming for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Boyd Gaming Narrative

If you want to dig deeper or chart your own investment angle, you can build a personalized take in just a few minutes. Do it your way.

A great starting point for your Boyd Gaming research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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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.

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