Why Accel Entertainment Was a Huge Winner on Wednesday
Investors were clearly impressed by the gaming company's third-quarter performance.
Accel Entertainment (ACEL) experienced a significant boost in its stock price on Wednesday, surging by over 13% across the trading day. This positive movement was primarily driven by the company's strong third-quarter earnings report, which surpassed analyst estimates. Accel Entertainment specializes in providing electronic casino-type games and ATMs for venues such as bars and restaurants.
The company's third-quarter financials, released shortly after the market closed on Tuesday, revealed a 10% year-over-year revenue growth, reaching nearly $364 million. Adjusted net income (non-GAAP) also increased by 12%, reaching over $18 million, or $0.22 per share. These figures exceeded analyst projections, which had modeled revenue at under $357 million and adjusted net income at $0.17 per share.
The company's growth was primarily attributed to an increase in the number of gaming machines deployed, which rose by 7% to 29,548, and a 6% increase in the number of locations to 4,705. Accel Entertainment reported notable growth in states like Georgia, Nebraska, and Illinois, with Fairmount Park Casino & Racing complex in Illinois being a standout performer.
The company expressed optimism about diversifying its business into other markets, which may further fuel future growth. Given Accel Entertainment's straightforward business model that consistently generates solid profitability and positive cash flow, many investors found it a wise decision to purchase the stock following the earnings report. The Motley Fool recommends exploring its premium services for further guidance on investing.
Written by urgent.news from Motley Fool's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
