Will Caesars (CZR) Stock Move Higher After Announcing New York State Casino Plan?

NEW YORK (TheStreet) -- Caesars Entertainment Corp. (CZR) announced plans today to pursue a license to develop a resort casino in Woodbury, NY.

The company is bidding to build a $750 million casino as other Las Vegas gambling companies stay away, Bloomberg reports.

Caesars will post a $1 million application fee for one of four available gaming licenses in New York state ahead of a deadline today, the company told Bloomberg.

The casino entertainment provider shares, while higher in pre-market trade, are down -1.65% to $18.43.

Must Read: Warren Buffett's 10 Favorite Growth Stocks

TheStreet Ratings team rates CAESARS ENTERTAINMENT CORP as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate CAESARS ENTERTAINMENT CORP (CZR) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and feeble growth in its earnings per share."

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

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 265.8% when compared to the same quarter one year ago, falling from -$480.30 million to -$1,756.90 million.
  • CAESARS ENTERTAINMENT CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, CAESARS ENTERTAINMENT CORP reported poor results of -$22.05 versus -$11.12 in the prior year. This year, the market expects an improvement in earnings (-$4.57 versus -$22.05).
  • 49.44% is the gross profit margin for CAESARS ENTERTAINMENT CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -84.53% is in-line with the industry average.
  • Net operating cash flow has significantly increased by 59.84% to -$108.50 million when compared to the same quarter last year. In addition, CAESARS ENTERTAINMENT CORP has also vastly surpassed the industry average cash flow growth rate of -31.16%.
  • Compared to its closing price of one year ago, CZR's share price has jumped by 32.67%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in CZR do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
  • You can view the full analysis from the report here: CZR Ratings Report
STOCKS TO BUY: TheStreet's Stocks Under $10 has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more. 

If you liked this article you might like

Caesars Has Big Plans for Japan: LIVE MARKETS BLOG

Caesars Has Big Plans for Japan: LIVE MARKETS BLOG

Ceasars Goes All in on Japan With Plans for Two Resort Concepts

Ceasars Goes All in on Japan With Plans for Two Resort Concepts

Casino Stocks Rebound Following Las Vegas Attack

Casino Stocks Rebound Following Las Vegas Attack

Casino, Gun Stocks Continue to React in Wake of Deadliest U.S. Shooting

Casino, Gun Stocks Continue to React in Wake of Deadliest U.S. Shooting