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TheStreet Open House

Why Boyd Gaming (BYD) Stock Is Spiking Today

NEW YORK (TheStreet) -- Shares of Boyd Gaming Corp. (BYD) are higher by 5.72% to $11.38 after the company reached a settlement with Atlantic City regarding tax appeals dating back to 2011, the Wall Street Journal reports.

The settlement is dated June 5 and under its terms Atlantic City must refund $88.25 million to Boyd Gaming for the 2011, 2012, and 2013 tax years.

Boyd Gaming, a multi-jurisdictional gaming company, will also receive a tax-credit of $17.85 million for 2014.

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The company said it believes the change "will result in significantly lower expenses for real estate taxes as compared to 2013," the WSJ reports.

Boyd Gaming agreed not to contest property tax assessments for 2011 through 2015 as part of the deal.

Separately, TheStreet Ratings team rates BOYD GAMING CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate BOYD GAMING CORP (BYD) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, compelling growth in net income and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • BOYD GAMING CORP has improved earnings per share by 14.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BOYD GAMING CORP continued to lose money by earning -$0.87 versus -$10.30 in the prior year. This year, the market expects an improvement in earnings ($0.09 versus -$0.87).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Hotels, Restaurants & Leisure industry average, but is less than that of the S&P 500. The net income increased by 15.1% when compared to the same quarter one year prior, going from -$7.28 million to -$6.18 million.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.0%. Since the same quarter one year prior, revenues slightly dropped by 3.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • Net operating cash flow has decreased to $57.17 million or 35.12% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The debt-to-equity ratio is very high at 9.19 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, BYD has a quick ratio of 0.58, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • You can view the full analysis from the report here: BYD Ratings Report
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