Feedback on Gaming/Lodging Case Study - Need some recs

Hi All,

I have a case study I am working on for a public gaming / casino company that expects to bring in about $700m by FYE. I have never valued a Gaming / Casino company before and have to answer the following questions on how I would value it, what is the most ideal strategy for the company to implement and and how would I would seek to monetize this perspective?

I am putting together a three statementDCF and Comps I sourced from FS and plan to put together a football field on valuation. Is there any public decks floating out there on how I can best present this in 8-10 slides?  Any recommendation on how to approach understanding the company? From my initial review of the company, its significantly deleveraged its balance sheet, its a capital intensive industry with a moat of regulatory red tape. The company is diversified within owning a portfolio of gaming assets that are local casinos and branded tavern operations.

Anything that would provide some insight on how I can best approach this is greatly appreciated.

Thank you!

5 Comments
 

Based on the most helpful WSO content, here are some recommendations and insights for your case study on a public gaming/casino company:

Presentation Tips:

  1. Perfect Formatting:

    • Utilize the slide master feature to ensure consistency.
    • Turn on the "View Gridlines" feature to maintain alignment and structure.
    • Bad formatting can detract from the presentation's impact.
  2. Graphs and Graphics:

    • Use graphs and graphics as much as possible. A well-placed graph can convey complex information more effectively than text.
    • Ensure that each slide is visually appealing and not overcrowded with information.
  3. Conciseness:

    • Use bullet points and be concise. Avoid long paragraphs and aim for clarity.
    • Consider the "thud factor" – while it's important to have comprehensive information, ensure that the main points are easily accessible.

Structuring Your Deck:

  1. Executive Summary:

    • Create a one-page executive summary that mirrors the structure of the upfront deck. This should summarize the key points and findings.
  2. Slide Organization:

    • Re-order slides to tell a coherent story. Group slides by the key questions they answer.
    • For example, create separate sections for valuation, strategy, and monetization perspectives.
  3. Valuation Techniques:

    • Include a three-statement model, DCF, and comparable company analysis.
    • Present a football field chart to visually compare different valuation methods.

Understanding the Company:

  1. Initial Review:

    • Start with the investor presentation to get an overview of the company. This will provide context and highlight key areas to focus on.
    • Identify the type of business model (e.g., local casinos, branded tavern operations) and any unique aspects such as regulatory challenges.
  2. Financial Analysis:

    • Review the company's financial statements, focusing on leverage, capital intensity, and diversification.
    • Analyze historical performance and build out a forward model based on this data.

Additional Resources:

By following these guidelines, you can create a compelling and well-structured presentation for your case study. Good luck!

Sources: Anyone have any tips on putting together presentation materials?, Are Bank Pitchbooks Too Boring ??? Would Trendy 'Start-Up' Style Decks Work In This Industry ?, Want to build a startup & raise some money? Part II, Case study interview for MBB consulting - 24 of my best tips on how to get in, Basic Guide Ramping Up On A Company With Public Information Part Two

I'm an AI bot trained on the most helpful WSO content across 17+ years.
 
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Read recent initiating coverage on other casino / gaming companies (LVS, CZR, WYNN, etc..) this will give you good insight into how the industry dynamics, how the business makes money, and how to value the business. I’ve done case studies on a casino company before and did a DCF (just a tip WACC is probably higher than you think with these types of co.s depending on leverage profile) as well as applied a P/E multiple for my price target.
As for the presentation, you need to set the stage for the industry, talk through the fundamentals (regulatory aspects, high capital intensity, typically lower ROIC, competition). Explain the business model, room revenue, food and drinks revenue, gaming revenue (mass market and VIP), types of gaming (slots, table games, etc…). Really understand the key drivers, RevPAR, table hold, etc… Need to show where the focus co. is positioned vs comps (does it trade at a premium/discount and why). Then would move into valuation, not sure if a football field is necessary but talk through DCF analysis and multiple analysis, understand that multiple is a shorthand for DCF and there are imbedded revenue growth, margin, and capital intensity assumptions. Hope this helps

 

This is very useful and thank you. The company I am valuing in short has divested 3 noncore assets over the past 9 months and heavily deleveraged their balance sheet (below 2x Net Leverage) and have worked more favorable credit terms by pushing out the maturity walls. Rn, the WACC I have for this company is 7.5% which I find to be a little low in my opinion. I'm not sure what would be the expected discount rate for these companies as it is a highly consolidated industry where size really does matter for these companies in terms of pulling in market share. Where I am stuck is on the operating model and how I should be laying out my growth rates (I have two Equity Research reports but only gives projections out to FY25). I was thinking of creating a scenario analysis with different cases of Equity Research / FS / CapIQ etc.

However, for the deck, that is all great information and I will incorporate.

For disclosure, the company is Golden Entertainment (GDEN) and my comps are Everi Holdings, Monarch Casino, PlayAGS, Accel, Century Casinos, Full House Resorts, Inspired Entertainment, Red Rocks Resorts and Bally's Corpotation with little to now tailoring as of yet (Wondering if I should the names you mentioned above). I derived the levered Betas from FactSet but will have access to CapIQ here shortly. Based off this pull from FS, it shows GDEN to be ~1.2bn as of March 30th, 2024.

 

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