Casino gaming is usually one of the most profitable endeavors. However, casino traffic suffered from the coronavirus outbreak along with other businesses. As the authorities put in place social distancing restrictions and forced shutdowns, the money flow in casinos stopped also.
Nevada-based Everi Holdings controls subsidiary companies that design, develop, and manufacture casino games. While the stock is very successful, usually, the current crisis is weighing heavily on the company.
However, experts think the damage doesn’t last long. Everi has many hidden resources. The company officers have been buying shares recently, but not selling afterwards. Two purchases, which occurred last week, were more notable: Eileen Raney and Maureen Mullarkey, the board of Directors members, bought 20,000 and 10,000 shares, respectively, for $120,000 and $60,000.
Raney’s purchase was the biggest single insider buy in the Everi’s history. Furthermore, the stock is currently trading below $2, but both directors were willing to pay $6 or more per share.
However, their motives become apparent in light of the last revenue report. While the EPS was slightly disappointing, earnings still increased significantly over the previous year. And revenue was just as strong. Growing by 21% year-over-year, it came in at $145.18 million and beat the analysts forecast by 9%.
It seems Everi has a solid base due to its growing revenues to weather the current market storms. When the current restrictions come to an end, there will probably be a strong demand for casinos, and the stock will gain significantly.
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What do analysts say?
Wall Street experts are positive that Everi has strong potential. George Sutton, Craig-Hallum’s analyst, noted that the 35% pullback during the past few weeks is very opportunistic for investors, as the company has solid premium games growth. Experts see no signs of a slowdown with a splurge of new products coming.
Sutton set his price target at $16 for the stock. If the target is met, the investors would see an 809% upside. Barry Jonas, of SunTrust Robinson, also supports $16 price per share.
However, Everi is a penny stock, meaning that its shares’s price is low, at just $1.65. The company’s average price target at $15 suggests room for an impressive 750% upside potential.