Boyd Gaming Corporation (NYSE:BYD), is not the largest company out there, but it saw a decent share price growth in the teens level on the NYSE over the last few months. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine Boyd Gaming’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
Check out our latest analysis for Boyd Gaming
What Is Boyd Gaming Worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 9.8% below my intrinsic value, which means if you buy Boyd Gaming today, you’d be paying a fair price for it. And if you believe the company’s true value is $67.55, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Boyd Gaming’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of Boyd Gaming look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of Boyd Gaming, it is expected to deliver a negative earnings growth of -6.4%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What This Means For You
Are you a shareholder? BYD seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on BYD for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. In addition to this, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on BYD should the price fluctuate below its true value.
If you want to dive deeper into Boyd Gaming, you’d also look into what risks it is currently facing. For example, we’ve found that Boyd Gaming has 3 warning signs (1 shouldn’t be ignored!) that deserve your attention before going any further with your analysis.
If you are no longer interested in Boyd Gaming, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
What are the risks and opportunities for Boyd Gaming?
Trading at 9.8% below our estimate of its fair value
Earnings grew by 31.8% over the past year
Earnings are forecast to decline by an average of 4.4% per year for the next 3 years
Significant insider selling over the past 3 months
Has a high level of debt
View all Risks and Rewards
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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.