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1. Company Snapshot

1.a. Company Description

Monarch Casino & Resort, Inc., through its subsidiaries, owns and operates the Atlantis Casino Resort Spa, a hotel and casino in Reno, Nevada.The company also owns and operates the Monarch Casino Resort Spa Black Hawk in Black Hawk, Colorado.As of December 31, 2021, its Atlantis Casino Resort Spa featured approximately 61,000 square feet of casino space; 818 guest rooms and suites; 8 food outlets; 2 gourmet coffee and pastry bars; a 30,000 square-foot health spa and salon with an enclosed pool; 2 retail outlets offering clothing and gift shop merchandise; an 8,000 square-foot family entertainment center; and approximately 52,000 square feet of banquet, convention, and meeting room space.


The company's Atlantis Casino Resort Spa also featured approximately 1,400 slot and video poker machines; approximately 37 table games, including blackjack, craps, roulette, and others; a race and sports book; a 24-hour live keno lounge; and a poker room.In addition, its Monarch Casino Resort Spa Black Hawk featured approximately 60,000 square feet of casino space; approximately 1,100 slot machines; approximately 40 table games; 10 bars and lounges; 4 dining options; 516 guest rooms and suites; banquet and meeting room space; a retail store; a concierge lounge; an upscale spa and pool facility; and a nine-story parking structure with approximately 1,350 spaces, as well as valet parking with a total parking capacity to approximately 1,500 spaces.The company was founded in 1972 and is based in Reno, Nevada.

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1.b. Last Insights on MCRI

Monarch Casino & Resort's recent performance was negatively impacted by industry headwinds, including macroeconomic risks and declining casino foot traffic. The company's premium positioning and focus on affluent customers provide some buffer, but long-term concerns include a shrinking Baby Boomer population and rising online sports betting. Additionally, slowing revenue and EPS growth compared to prior quarters may warrant caution. According to a recent report, the company's strong quarterly results, with revenue up 3.6% and net income rising 14.4%, were overshadowed by missed revenue expectations. A "hold" rating was recommended due to these industry headwinds (Source: Monarch Casino & Resort Reports Solid Quarterly Results But Industry Headwinds Merit A Hold).

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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American Century Companies Inc. Acquires 24,472 Shares of Monarch Casino & Resort, Inc. $MCRI

Nov -29

Source: defenseworld.net

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Critical Contrast: Roblox (NYSE:RBLX) & Monarch Casino & Resort (NASDAQ:MCRI)

Nov -22

Source: defenseworld.net

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Connor Clark & Lunn Investment Management Ltd. Grows Position in Monarch Casino & Resort, Inc. $MCRI

Nov -21

Source: defenseworld.net

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Bank of New York Mellon Corp Decreases Position in Monarch Casino & Resort, Inc. $MCRI

Nov -19

Source: defenseworld.net

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Monarch Casino & Resort: Still Beating The Odds Despite Macro Gloom

Oct -29

Source: seekingalpha.com

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Monarch Casino & Resort Reports Solid Quarterly Results But Industry Headwinds Merit A Hold

Oct -22

Source: seekingalpha.com

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Compared to Estimates, Monarch Casino (MCRI) Q3 Earnings: A Look at Key Metrics

Oct -21

Source: zacks.com

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Monarch Casino (MCRI) Q3 Earnings Beat Estimates

Oct -21

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.24%)

6. Segments

Casino

Expected Growth: 2.5%

Monarch Casino & Resort's 2.5% growth is driven by increasing visitation and gaming revenue, fueled by a strong local economy, effective marketing strategies, and a renovated casino floor with new amenities. Additionally, the company's focus on player loyalty programs and premium services contributes to higher average spend per visitor.

Food and Beverage

Expected Growth: 1.8%

Monarch Casino & Resort, Inc.'s Food and Beverage segment growth of 1.8% is driven by increasing visitor traffic, strategic menu pricing, and enhanced customer experience through renovated dining facilities. Additionally, the company's focus on premium offerings, such as fine dining and specialty restaurants, contributes to the growth.

Hotel

Expected Growth: 2.2%

Monarch Casino & Resort, Inc.'s 2.2% hotel growth is driven by increasing gaming revenue, strategic marketing efforts, and a strong loyalty program. Additionally, the hotel's prime location and amenities, such as the upscale Atlantis Casino, attract high-end customers. Furthermore, the company's focus on operational efficiency and cost management enables it to maintain a competitive pricing strategy, contributing to its growth.

Other

Expected Growth: 1.5%

Monarch Casino & Resort's 1.5% growth is driven by increasing gaming revenue, improved hotel occupancy rates, and enhanced food and beverage offerings. Additionally, strategic marketing initiatives, loyalty programs, and a strong focus on customer experience contribute to the growth. Furthermore, the company's efforts to optimize operational efficiencies and reduce costs also support the growth momentum.

7. Detailed Products

Casino Gaming

Monarch Casino & Resort, Inc. offers a wide range of casino games, including slots, table games, and poker, providing an exciting gaming experience for its customers.

Hotel Accommodations

The company provides luxurious hotel rooms and suites, offering comfortable and convenient accommodations for its guests, complete with amenities like restaurants, bars, and entertainment options.

Dining and Nightlife

Monarch Casino & Resort, Inc. offers a variety of dining options, from fine dining to casual eats, as well as bars and lounges, providing a vibrant nightlife experience.

Entertainment and Events

The company hosts various entertainment options, including concerts, comedy shows, and sporting events, providing a unique experience for its guests.

Spa and Wellness

Monarch Casino & Resort, Inc. offers a range of spa and wellness services, including massages, facials, and fitness classes, promoting relaxation and rejuvenation.

8. Monarch Casino & Resort, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Monarch Casino & Resort, Inc. faces moderate threat from substitutes, as customers have alternative options for entertainment and leisure activities.

Bargaining Power Of Customers

Monarch Casino & Resort, Inc. has a diverse customer base, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

Monarch Casino & Resort, Inc. relies on various suppliers for goods and services, but has some bargaining power due to its size and reputation.

Threat Of New Entrants

Monarch Casino & Resort, Inc. operates in a highly regulated industry, but new entrants can still pose a significant threat, especially with the rise of online gaming.

Intensity Of Rivalry

Monarch Casino & Resort, Inc. operates in a highly competitive industry, with many established players and a high level of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 1.23%
Debt Cost 10.48%
Equity Weight 98.77%
Equity Cost 12.38%
WACC 12.36%
Leverage 1.25%

11. Quality Control: Monarch Casino & Resort, Inc. passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Monarch Casino & Resort

A-Score: 6.3/10

Value: 3.6

Growth: 7.0

Quality: 8.6

Yield: 3.0

Momentum: 8.5

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Playa Hotels & Resorts

A-Score: 5.9/10

Value: 3.4

Growth: 7.8

Quality: 5.9

Yield: 0.0

Momentum: 9.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
PlayAGS

A-Score: 5.3/10

Value: 5.1

Growth: 6.7

Quality: 5.7

Yield: 0.0

Momentum: 6.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Golden Entertainment

A-Score: 5.0/10

Value: 6.0

Growth: 4.8

Quality: 4.2

Yield: 6.0

Momentum: 2.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Everi

A-Score: 4.8/10

Value: 5.1

Growth: 4.7

Quality: 4.8

Yield: 0.0

Momentum: 6.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Canterbury Park

A-Score: 4.3/10

Value: 3.6

Growth: 2.3

Quality: 5.2

Yield: 3.0

Momentum: 6.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

96.01$

Current Price

96.01$

Potential

-0.00%

Expected Cash-Flows