Boyd Gaming (BYD): Neutral Outlook, What's Next?

Boyd Gaming Corporation operates 28 wholly-owned gaming entertainment properties across multiple states, including Nevada, Illinois, and Louisiana. It also operates 'Boyd Interactive', a B2B and B2C online casino gaming business. Through a partnership, Boyd operates 'FanDuel'-branded sportsbooks at 16 of its properties and offers online sports betting under the 'FanDuel' brand in most states where its properties are located. The company's properties are segmented into Las Vegas Locals, Downtown Las Vegas, Midwest & South, and Online. Boyd focuses on building loyalty with core customers and maximizing gaming revenues. The Downtown Las Vegas properties target Hawaiian customers, offering tailored packages and promotions. Boyd differentiates itself by operating both brick-and-mortar casinos and online gaming platforms, leveraging strategic partnerships for sports betting, and focusing on specific customer segments in its various markets.

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BYD's technical outlook appears bearish in the short to medium term. While the most recent price action shows a slight increase with the closing price at $79.415, this follows a period of significant decline from highs around $87 in early October. The price is currently below the 21-day EMA of $81.15 and the 50-day SMA of $83.80, suggesting continued downward pressure. Momentum indicators also point to weakness; the MACD is negative at -1.62, with the MACD line well below the signal line, and the RSI at 42.59 indicates that the stock is approaching oversold conditions, but not quite there yet. The Stochastic Oscillator shows the %K line at 21.52, and %D at 14.05, which is also bearish. The ADX is elevated at 27.99, suggesting a strong trend is in place, and the negative directional indicator (DMN) is significantly higher than the positive directional indicator (DMP), reinforcing the bearish sentiment. The Bollinger Bands show that the price has recently bounced off the lower band, but the overall trend suggests further downside potential. The ROC 20 is at -7.07, which is bearish.

Boyd Gaming's MD&A presents a somewhat positive picture, tempered by increased expenses. Total revenues for the three months ended September 30, 2025, increased by 4.5% to $1,004.4 million, driven by online reimbursements and gaming revenue increases. However, operating income decreased by 36.5% to $139.8 million due to a $65.1 million increase in 'impairment of assets'. Net income increased significantly due to a $1,748.0 million gain from the 'FanDuel Equity Sale'. From a segment perspective, the Midwest & South segment performed well, with revenues up 3.1%, while Las Vegas Locals saw a slight decrease of 0.5%. Online revenues decreased due to changes in market access agreements, although this was partially offset by Boyd Interactive's growth following the acquisition of Boyd Digital. Net cash provided by operating activities remained consistent at $701.4 million for the nine months ended September 30, 2025, compared to $695.0 million in the prior year. The company used proceeds from the FanDuel sale to reduce debt, with the credit facility balance decreasing from $1,300.3 million at the end of 2024 to $9.3 million as of September 30, 2025. The company plans to open a transitional casino in November 2025 and a resort in late 2027, with $150 million allocated to this project in 2025. The company is authorized to repurchase up to an additional $547.4 million in shares of common stock.

Boyd Gaming's Q2 2025 earnings call projects a moderately bullish sentiment, underpinned by solid financial results and strategic moves. The company reported a 4% increase in both revenues (excluding tax pass-through) and EBITDAR, reaching $358 million, driven by broad-based growth across operating segments. Keith Smith highlighted the FanDuel transaction, selling their 5% equity interest for $1.755 billion in cash, extending market access agreements through 2038 and adjusting rates. He emphasized this is 'not a precursor to another transaction' but rather a strategic monetization to invest in future growth. Josh Hirsberg noted the financial benefits, estimating after-tax proceeds of approximately $1.4 billion and annual interest expense savings of around $85 million. The company plans to increase its share repurchase target from $100 million to $150 million per quarter. While the Las Vegas Strip saw softer demand, the Las Vegas Locals segment showed strength, with revenue and EBITDAR growth driven by core customers and improving retail play. Management's tone suggests confidence in their diversified business model and disciplined capital allocation strategy.

BYD's financial performance presents a somewhat positive picture, though with some areas of concern. Revenue has shown an overall increasing trend, starting from $960.5M in Q1 2024 and reaching $1004.4M in Q3 2025, indicating growth in sales. The gross profit ratio has fluctuated, ranging between 0.508 and 0.529 in 2024, and settling at 0.413 in Q3 2025, suggesting some volatility in profitability. Operating cash flow has been consistently positive, with $205M generated in Q2 2025, which is a healthy sign. Total debt has increased from $3664.3M in Q1 2024 to $4258.7M in Q2 2025, indicating increased leverage. While revenue is growing and cash flow is positive, the increasing debt and fluctuating gross profit ratio warrant monitoring. Overall, the company appears to be in a reasonably stable financial position, but the increasing debt should be watched closely.

The company demonstrates a moderately bullish profile, characterized by solid revenue growth and improving profitability. Revenue has consistently increased, indicating strong market demand. The gross margin exhibits stability, suggesting efficient cost management. Return on Equity (ROE) has shown positive movement, signaling enhanced profitability and efficient use of shareholder equity. The Price-to-Earnings (P/E) ratio, while elevated, might be justifiable given the growth trajectory and positive ROE trend. The Debt-to-Equity ratio shows a slight increase, which warrants monitoring, but is counterbalanced by a healthy Current Ratio, implying sufficient liquidity to meet short-term obligations. Overall, the company presents a favorable picture with growth and profitability, though the leverage should be watched closely. The combination of growth and profitability suggests potential for continued positive performance over the next 12 months.