Caesars Entertainment (CZR) Following Argus Focus Is The Digital Growth Story Undervalued

• CZR
  -0.63%

Caesars Entertainment (CZR) is back in focus after research provider Argus highlighted its mix of roughly 50 U.S. gaming properties and detailed 2024 EBITDAR contributions from Las Vegas and regional operations.

Recent trading has been softer, with the share price slipping over the past week and month, and the 3-month share price return down 2.04%. However, Caesars Entertainment still carries a 24.15% year to date share price gain and a 34.61% 1-year total shareholder return, alongside a much weaker 3-year and 5-year total shareholder record. This suggests momentum is rebuilding from a low base as investors reassess the risk and reward profile around its property mix and ongoing research coverage.

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Bulls see Caesars Entertainment as a leaner, refocused casino group, with Las Vegas and regional EBITDAR roughly balanced. Bears point to recent share price softness and past long-term underperformance. Which case does the valuation math lean toward next?

Most Popular Narrative: 8% Undervalued

On the most followed narrative, Caesars Entertainment screens as undervalued, with a fair value of $31.93 against the last close at $29.25 and a 12.46% discount rate underpinning those estimates.

The rapid growth and sustained profitability in Caesars’ Digital segment, especially online casino and sports betting, reflects robust consumer adoption of digital and mobile gaming. This expands the customer base and provides higher margin recurring revenue streams. Anticipated continued digital expansion is described as a potential driver of both top-line revenue and higher EBITDA margins.

See why 24 investors see Caesars Entertainment as 8% undervalued.

Result: Fair Value of $31.93 (UNDERVALUED)

Still, the bullish Caesars Entertainment story runs into two clear snags: heavy debt with reported interest costs near US$2.3b, and pressure from rising labor and remodeling expenses.

Find out about the key risks to this Caesars Entertainment narrative.

Next Steps

Mixed signals around Caesars Entertainment can feel messy, so consider taking a closer look at the full picture yourself, including 3 key rewards and 1 important warning sign.

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