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Is Caesars Entertainment Stock on the Rise After Latest Developments?

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Written by Timothy Sykes Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs

Caesars Entertainment Inc. is seeing a remarkable uptick on Wednesday, with their stocks trading up by 6.27 percent. This surge is likely influenced by significant developments in the gaming and hospitality sectors, including positive news around new industry partnerships and robust quarterly earnings. Such growth points to growing investor confidence and promising future prospects for Caesars Entertainment.

Recent Developments:

  • Jerry Seinfeld returns for six more shows at The Colosseum at Caesars Palace in 2025, continuing a lasting relationship since 2003, with consistently sold-out performances.
  • The opening of Oddfellahs in downtown Portland marks Maine’s first in-person sports wagering location, through a partnership with First Tracks Investments LLC.
  • Caesars Entertainment celebrates 35 years of leadership in Responsible Gaming, focusing on pioneering programs promoting safe gambling during Responsible Gaming Education Month.
  • Shania Twain adds final performances to her Las Vegas residency, marking the 25th anniversary of her album ‘Come On Over,’ with shows running from January 22 to February 8, 2025.
  • Donny Osmond extends his residency at Harrah’s Las Vegas with new dates into 2025, celebrating the third anniversary of his acclaimed solo show, DONNY.

Candlestick Chart

Live Update at 10:44:38 EST: On Wednesday, October 02, 2024 Caesars Entertainment Inc. stock [NASDAQ: CZR] is trending up by 6.27%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Caesars Entertainment Inc.’s Recent Earnings Report and Key Financial Metrics

Caesars Entertainment recently reported strong performance, with a clear upward trend in their stock prices. Let’s look into the company’s financials and what they indicate for future performance.

Financial Overview:

The most recent financial report reflects impressive figures. Here’s a quick digest:

  • Revenue: Caesars Entertainment brought in $11.53B, growing by 15.87% over the past three years. These numbers paint a vibrant picture of robust performance and growth.
  • Gross Margin: Standing at 52.5%, Caesar’s ability to convert revenue into profit is strong.
  • Total Expenses: The company faced total expenses of $2.11B, which indicates management’s efficiency in controlling costs.
  • Net Income: However, with net income slipping into the negatives at -$122M, it’s clear that profitability still needs attention.

More Breaking News

Key Ratios:

  • EBITDA Margin: 28.3%, a healthy indicator of operational efficiency.
  • Return on Equity (ROE): -6.28%, suggesting shareholders haven’t seen substantial returns lately.
  • Debt to Equity Ratio: 5.83, reflecting considerable leverage. Yet, with a capable interest coverage ratio of 1.8, Caesar’s can manage its debt obligations.

Cash Flow Analysis:

Delving into cash flows, Caesars has shown strength in operating activities with $454M. Despite net negative in investing cash flows at -$328M, the free cash flow stood strong at $125M, pointing towards robust operational health.

Stock Price Insights:

Comparing the short-term data from late September to early October, the stock price fluctuated between $40.8 to $43.37. The recent uptrend on October 2 saw a peak at $43.7, reflecting strong investor confidence and response to recent developments.

Technical Analysis:

Examining the intraday data reveals resilience and momentum in the stock. Despite minor dips, the stock consolidates well with peaks aligning around the $43 mark – a critical resistance point.

Impact of News on Market

The Seinfeld Effect:

Jerry Seinfeld’s return to The Colosseum has created buzz, not just for comedy lovers but investors too. Since 2003, Seinfeld’s shows have been box-office smashes, consistently selling out and underscoring Caesar’s knack for securing high-demand acts. These performances act as magnets, drawing large crowds and boosting company profits.

Breaking New Grounds in Maine:

The opening of Oddfellahs, Maine’s first in-person sports wagering venue, marks a significant milestone. This isn’t just a new location; it’s the start of a promising venture with First Tracks Investments LLC. The demand for sports betting is on the rise, and this new location in Portland is well-positioned to capture a share of this lucrative market. Increased footfall translates to higher revenues and potentially better stock performance.

Responsible Gaming Leadership:

Caesars has always been at the forefront of promoting responsible gaming. Celebrating 35 years of leadership in this arena, it underscores the company’s long-term commitment to safe gambling. This responsible gaming ethos aligns with modern regulatory environments and enhances customer trust and loyalty, beneficial for sustainable growth.

Shania Twain and Donny Osmond’s Residencies:

Adding Shania Twain’s final shows to her Las Vegas residency and Donny Osmond extending his hit solo show are strategic moves. These artist residencies not only generate direct revenue but also drive ancillary spending on hospitality and gaming, leading to an all-round boost in profits.

Conclusion

Caesars Entertainment is riding a wave of positive developments, showing resilience and an ability to leverage entertainment and gaming partnerships effectively. The various new partnerships and events are likely to contribute to future revenue growth, which should provide support for the stock price in the medium term. Investors would do well to keep an eye on how these developments unfold and their subsequent impact on finances before making investment decisions.

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”