Caesars Entertainment (CZR) Showing Signs Of A Dead Cat Bounce Today

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Caesars Entertainment ( CZR) as a "dead cat bounce" (down big yesterday but up big today) candidate. In addition to specific proprietary factors, Trade-Ideas identified Caesars Entertainment as such a stock due to the following factors:

  • CZR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $44.8 million.
  • CZR has traded 99,106 shares today.
  • CZR is up 10.6% today.
  • CZR was down 6.2% yesterday.

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More details on CZR:

Caesars Entertainment Corporation owns, operates, or manages casino entertainment facilities. Its casino entertainment facilities include land-based casinos, riverboat or dockside casinos, and managed casinos, as well as casinos combined with a thoroughbred racetrack and a harness racetrack. Currently there are no analysts that rate Caesars Entertainment a buy, 3 analysts rate it a sell, and 1 rates it a hold.

The average volume for Caesars Entertainment has been 1.6 million shares per day over the past 30 days. Caesars Entertainment has a market cap of $2.3 billion and is part of the services sector and leisure industry. The stock has a beta of 1.25 and a short float of 42.6% with 7.36 days to cover. Shares are down 28.9% year-to-date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Caesars Entertainment as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:
  • 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 decreased by 19.3% when compared to the same quarter one year ago, dropping from -$761.20 million to -$908.10 million.
  • CZR has underperformed the S&P 500 Index, declining 15.90% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The gross profit margin for CAESARS ENTERTAINMENT CORP is rather high; currently it is at 50.32%. Regardless of CZR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, CZR's net profit margin of -41.04% significantly underperformed when compared to the industry average.
  • CAESARS ENTERTAINMENT CORP's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CAESARS ENTERTAINMENT CORP reported poor results of -$21.99 versus -$11.12 in the prior year. This year, the market expects an improvement in earnings (-$9.58 versus -$21.99).
  • The revenue growth came in higher than the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 1.5%. Growth in the company's revenue appears to have helped boost the earnings per share.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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