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Group 1 - Accel Entertainment, Inc. (ACEL) is experiencing significant activity in the options market, particularly with the Jul 18, 2025 $10 Put showing high implied volatility, indicating potential for a major price movement [1] - Implied volatility reflects market expectations for future stock movement, suggesting that investors anticipate a significant event that could lead to a rally or sell-off [2] - Accel Entertainment holds a Zacks Rank 2 (Buy) in the Gaming industry, which is in the top 36% of the Zacks Industry Rank, although recent earnings estimates have seen a downward revision from 22 cents to 21 cents per share [3][4] Group 2 - The high implied volatility may indicate a developing trading opportunity, as options traders often seek to sell premium on such options, hoping the stock does not move as much as expected by expiration [4]

Core Viewpoint - Accel Entertainment (ACEL) shares have increased by 4.1% recently, with analysts suggesting a potential upside of 36.7% based on a mean price target of $15.67 [1][11]. Price Targets and Analyst Estimates - The mean price target consists of three short-term estimates with a standard deviation of $0.58, indicating a consensus among analysts [2]. - The lowest estimate is $15, suggesting a 30.9% increase, while the highest estimate is $16, indicating a 39.6% increase from the current price [2]. - A low standard deviation signifies a high degree of agreement among analysts regarding the stock's price movement [9]. Earnings Estimates and Market Sentiment - Analysts are optimistic about ACEL's earnings prospects, as indicated by upward revisions in EPS estimates, which have shown a strong correlation with stock price movements [11]. - Over the past 30 days, two earnings estimates have been revised upward, leading to an 8% increase in the Zacks Consensus Estimate [12]. - ACEL holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, suggesting a strong potential for upside [13].

Group 1 - Accel Entertainment's stock is currently facing challenges despite potential upside linked to Fairmount Park, a historic property in the St. Louis metro area [1] - The company specializes in analyzing restaurant stocks across various segments, including QSR, fast casual, casual dining, fine dining, and family dining [1] - Advanced analytical models and specialized valuation techniques are employed to provide detailed insights and actionable strategies for investors [1] Group 2 - The founder of Goulart's Restaurant Stocks actively engages in academic and journalistic initiatives, contributing to institutions that promote individual and economic freedom [1] - Previous contributions included discussions on monetary policy, financial education, and financial modeling aimed at making these subjects accessible to a broader audience [1]

Core Insights - Accel Entertainment reported quarterly earnings of $0.24 per share, exceeding the Zacks Consensus Estimate of $0.18 per share, and showing an increase from $0.22 per share a year ago, resulting in an earnings surprise of 33.33% [1] - The company achieved revenues of $323.91 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.89% and up from $301.82 million year-over-year [2] - The stock has underperformed slightly, losing about 0.3% since the beginning of the year, compared to a decline of 3.3% in the S&P 500 [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.22 on revenues of $331.38 million, and for the current fiscal year, it is $0.81 on revenues of $1.32 billion [7] - The estimate revisions trend for Accel Entertainment is currently unfavorable, leading to a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Industry Context - The Gaming industry, to which Accel Entertainment belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Another company in the same industry, Playtika Holding, is expected to report quarterly earnings of $0.11 per share, reflecting a year-over-year decline of 26.7%, with revenues projected at $697.25 million, up 7.1% from the previous year [9][10]

Financial Data and Key Metrics Changes - The company reported total revenue of $344 million for Q1 2025, marking a 7% year-over-year increase, which is the highest quarterly revenue since going public [5] - Adjusted EBITDA for the same period was $50 million, also reflecting a 7% year-over-year growth [5] - Capital expenditures for Q1 were $27 million, with a full-year CapEx forecast of $75 million to $80 million [19][20] Business Line Data and Key Metrics Changes - Revenue growth was particularly strong in Illinois and Montana, with year-over-year increases of 48% in both states [5][6] - Revenue per location in core states showed varied performance: Illinois at $885 per day (up 2.9%), Montana at $610 per day (up 2.7%), and Nevada at $802 per day (down 5.3%) [18] Market Data and Key Metrics Changes - Nebraska and Georgia experienced strong double-digit revenue growth, albeit from a smaller base [6] - The company has integrated operations in Louisiana, adding 96 locations and 614 terminals, which is expected to drive future revenue growth [7][8] Company Strategy and Development Direction - The company continues to focus on a decentralized gaming model, which allows for flexibility and efficient capital allocation based on local demand trends [9][10] - The acquisition of Kucan Gaming is expected to enhance the company's southeastern market presence and operational synergies [6][8] - The opening of Fairmont Park Casino is seen as a significant growth driver, with plans for further development in the future [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to scale proprietary products and services across its national footprint, enhancing financial performance and free cash flow [10][21] - The company remains optimistic about consumer demand and does not anticipate significant impacts from tariffs on its existing business [27][28] Other Important Information - The company announced the departure of CFO Matt Ellis, with Mark Phelan stepping in as acting CFO [14][15] - The company is committed to returning capital to shareholders through share repurchases, having repurchased 1 million shares at an average price of $10.34 per share [20] Q&A Session Summary Question: Impact of tariffs on growth and CapEx - Management indicated that most CapEx prices are locked in, minimizing the impact of tariffs on existing business [27][28] Question: Weather impact on performance - Weather was reported as a neutral factor, with no significant negative impact on consumer behavior [30][31] Question: Strategy for underperforming locations - The company continues to prune underperforming locations to optimize profitability and reallocate resources to better-performing areas [35][36] Question: Update on Louisiana's performance - Early indications from Louisiana are positive, with ongoing remodeling and optimization efforts expected to enhance performance [38][39] Question: Timing and next steps for Phase two of Fairmont - Phase two will be informed by the operational performance of Phase one, with clarity expected after the racing season ends in October [47] Question: CapEx expectations for 2025 - The company reiterated its CapEx expectations of $75 million to $80 million for 2025, with a return to normalized levels of $40 million to $45 million thereafter [50][51]

Financial Data and Key Metrics Changes - The company reported total revenue of $344 million for Q1 2025, marking a 7% year-over-year increase, and adjusted EBITDA of $50 million, also a 7% increase year-over-year [5][15] - As of March 31, the company had 27,180 terminals across 4,391 locations, reflecting year-over-year increases of 4.4% and 2.9% respectively [15] Business Line Data and Key Metrics Changes - Revenue growth was particularly strong in Illinois and Montana, with year-over-year increases of 48% in Illinois and 48% in Montana [6] - Revenue per location in core states showed varied performance: Illinois at $885 per day (up 2.9%), Montana at $610 per day (up 2.7%), Nevada at $802 per day (down 5.3%), Louisiana at $972 per day, Nebraska at $263 per day (up 12.9%), and Georgia at $145 per day (up 59.3%) [16] Market Data and Key Metrics Changes - Nebraska and Georgia continued to show strong double-digit revenue growth, while Nevada experienced a slight revenue decline due to the loss of a key customer [6] - The company has completed the integration of operations in Louisiana, which is expected to generate revenue growth opportunities [6] Company Strategy and Development Direction - The company aims to drive further synergies and performance improvements through the integration of acquired operations and the rollout of proprietary products across its national footprint [7][9] - The decentralized gaming model allows the company to efficiently allocate capital based on local demand trends, differentiating it from larger operators [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strength of consumer demand and the company's ability to scale operations effectively [25][29] - The company remains focused on generating organic revenue growth with expanding margins and improved free cash flow [19] Other Important Information - The Fairmont Park Casino opened on April 18, 2025, marking a significant milestone for the company [10] - The company announced the departure of CFO Matt Ellis, with Mark Phelan stepping in as acting CFO [13][14] Q&A Session Summary Question: Impact of tariffs on growth and CapEx - Management indicated that most CapEx for the year has locked in prices, minimizing tariff impacts, and noted strong consumer demand [24][25] Question: Weather impact on performance - Weather was reported as a neutral factor, with no significant negative impact on consumer behavior [28][29] Question: Strategy for underperforming locations - The company continues to prune underperforming locations to optimize profitability and reallocate assets to better-performing situations [32][33] Question: Update on Louisiana's performance - Early trends in Louisiana are positive, with ongoing remodeling and optimization efforts expected to enhance performance [35][36] Question: Timing and next steps for Fairmont Phase two - Phase two will be informed by the operational performance of Phase one, with clarity expected after the racing season ends in October [45] Question: CapEx expectations for 2025 - The company reiterated its CapEx forecast of $75 million to $80 million for 2025, with expectations of returning to normalized levels of $40 million to $45 million thereafter [48][49]

First Quarter 2025 Earnings Presentation May 2025 Important Information Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, contained in this presentation are forward-looking statements, including, but not limited to, any statements regarding our estimates of number of gaming ter ...

Financial Performance - Net revenues for Q1 2025 increased by 7.3% to $323.912 million, compared to $301.817 million in Q1 2024[143] - Net gaming revenue rose by 4.8% to $301.951 million, while amusement revenue decreased by 3.6% to $5.908 million[143] - Manufacturing revenue surged by 74.6% to $3.858 million, and ATM fees and other revenues increased by 128.3% to $12.195 million[143] - Total operating expenses grew by 7.9% to $297.960 million, with cost of revenue increasing by 5.9% to $221.472 million[143] - Net income for Q1 2025 was $14.613 million, a significant increase of 97.0% from $7.416 million in Q1 2024[143] - Adjusted EBITDA for Q1 2025 was $49.5 million, up 7.1% from $46.2 million in Q1 2024, attributed to an increase in locations and gaming terminals[165] - Net income for Q1 2025 was $14.6 million, a 97.0% increase from $7.4 million in Q1 2024[165] Taxation - The effective tax rate for income tax expense was approximately 25.4%, with income tax expense rising to $4.993 million[143] - The effective tax rate for Q1 2025 was 25.5%, down from 39.1% in Q1 2024[153] - The tax on net gaming revenue in Illinois increased from 34% to 35% effective July 1, 2024[134] Operational Expansion - The company opened Fairmount Park - Casino & Racing in April 2025, enhancing its market presence in Illinois[125] - The number of gaming terminals increased by 4.4% to 27,180 in Q1 2025, compared to 26,029 in Q1 2024[158] - The number of locations grew by 2.9% to 4,391 in Q1 2025, up from 4,267 in Q1 2024[155] - Location hold-per-day in Illinois increased by 2.9% to $885 in Q1 2025, compared to $860 in Q1 2024[160] Cash Flow and Investments - For the three months ended March 31, 2025, net cash provided by operating activities was $44.8 million, an increase of $16.0 million or 55.7% compared to the prior-year period[173] - Net cash used in investing activities for the same period was $26.2 million, reflecting a slight increase of $0.3 million or 1.1% compared to the prior-year period[175] - Net cash used in financing activities was $27.9 million, an increase of $17.4 million or 164.9% compared to the prior-year period, primarily due to higher net repayments on debt and stock repurchases[176] Debt and Interest - Interest expense for Q1 2025 was $8.685 million, reflecting a slight increase of 0.3% compared to the previous year[143] - The company recognized an unrealized loss of $1.1 million on the change in fair value of interest rate caplets for the three months ended March 31, 2025, compared to an unrealized gain of $1.1 million for the same period in 2024[172] - Interest income on the caplets was $1.8 million for the three months ended March 31, 2025, down from $2.6 million in the prior-year period[172] - As of March 31, 2025, borrowings under the senior secured credit facility amounted to $582.5 million, with a potential annual impact of $2.8 million on future earnings if interest rates increase by 1.0%[181] Capital Expenditures - Capital expenditures are anticipated to be approximately $75–80 million in 2025, with specific allocations of $31–32 million for Fairmount, $5–7 million for Louisiana, and $39–41 million for other expenditures[175] Seasonal Trends - Seasonal trends affect the company's operations, with gross revenue per machine typically lower in summer and higher between February and April[179] Compliance and Accounting Policies - The company remained in compliance with all debt covenants under the Credit Agreement as of March 31, 2025[170] - The company applies the same critical accounting policies as described in its Annual Report on Form 10-K for the year ended December 31, 2024[178]

Financial Performance - Record revenues of $323.9 million in Q1 2025, an increase of 7.3% compared to Q1 2024[4] - Net income of $14.6 million for Q1 2025, an increase of 97.0% compared to Q1 2024[4] - Adjusted EBITDA of $49.5 million for Q1 2025, an increase of 7.1% compared to Q1 2024[4] - Net revenues for Q1 2025 reached $323.9 million, a 7.4% increase from $301.8 million in Q1 2024[23] - Net income attributable to Accel Entertainment, Inc. was $14.6 million, compared to $7.4 million in the same period last year, representing a 97.0% increase[23] - The company reported an operating income of $26.0 million for Q1 2025, compared to $25.6 million in Q1 2024, a 1.5% increase[23] - Basic earnings per share increased to $0.17 in Q1 2025, up from $0.09 in Q1 2024, reflecting an 88.9% growth[23] Operational Metrics - Ended Q1 2025 with 4,391 locations, an increase of 2.9% compared to Q1 2024[4] - Ended Q1 2025 with 27,180 gaming terminals, an increase of 4.4% compared to Q1 2024[4] - Location hold-per-day in Illinois increased by 2.9% to $885[8] Expenses and Liabilities - Total operating expenses increased to $298.0 million in Q1 2025, up from $276.3 million in Q1 2024, indicating a 7.8% rise[23] - Accel Entertainment's total current liabilities rose to $130.8 million from $118.4 million at the end of 2024, a 10.5% increase[25] Cash and Assets - Cash and cash equivalents as of March 31, 2025, were $271.9 million, slightly down from $281.3 million at the end of 2024[25] - Total assets decreased to $1.05 billion from $1.05 billion at the end of 2024, showing a marginal decline[25] Strategic Initiatives - Commenced casino and racing operations at Fairmount Park Casino & Racing in April 2025[4] - The company continues to focus on expanding into casino operations and horse racing, which are part of its strategic growth initiatives[17] - The company expects to maintain attractive low-teens returns on capital and generate growing free cash flow[3] Shareholder Actions - Repurchased 1 million shares of Accel Class A-1 common stock in Q1 2025 for approximately $10.2 million[4]