Monarch Casino Stock: Run Room Supports Strong Buy Guidance (NASDAQ:MCRI)
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Monarch Casino & Resort, Inc. (NASDAQ:MCRI) is a buy-on-the-dip scenario with low risk.
Monarch Casino stock is valued at $68.80 a share. Its intrinsic value is estimated at $93. 80 a shares.
2010 adjusted EBITDA was $2.95m with a margin of 21.6%. In 21st century it will be $137.3m, with margin 34.7%.
Monarch Casino owns two casinos in Nevada. The Atlantis in Reno has a market share of 15.7% and the Black Hawk has 60,000 sf of casino space and 516 rooms.
Both markets have strong population growth trends. Reno/Sparks has grown 15.3% between 2010 and 2020, Denver 16.5%. The 2020+ pandemic has accelerated flight from California and other high tax, deteriorating lifestyle cities of the west. Both markets enjoy diversification in their economies. MCRI bought the street casino at Black Hawk for $76m in 2012. The addressable population within reasonable driving distance from Blackhawk is 3.2m.
MCRI generated net revenues of $395m and an adjusted EBITDA of $137m for 2021. The company has a market cap of about $1.29b. Churchill Downs Incorporated (CHDN) has 4X the revenue and a 4x the market value. MCRI is about to absorb the Colorado property. It is likely to look for a merger partner. It's 30% of the stock is held by the Farahi family interests. They hold 11%. They have a good track record of making good decisions. Las Vegas Sands (LVS) benefitted from his personal skin in the game.
