Accel Entertainment (NYSE:ACEL) Issues Earnings Results, Misses Expectations By $0.04 EPS

Accel Entertainment (NYSE:ACEL) released its earnings results on Tuesday. The company reported $0.15 earnings per share for the quarter, missing the consensus estimate of $0.19 by ($0.04), FiscalAI reports. Accel Entertainment had a net margin of 4.08% and a return on equity of 22.59%. The company had revenue of $368.13 million during the quarter, compared to analyst estimates of $356.66 million.

Here are the key takeaways from Accel Entertainment’s conference call:

• Record Q2 results: Revenue rose 10% year over year to $368 million and adjusted EBITDA increased 11% to $59 million, while net income nearly doubled to $13 million.
• Chicago is nearing launch after the first city video-gaming licenses began processing; Accel has been approved at 17 of the 39 establishments licensed so far and expects initial locations to go live within weeks, although full deployment could take more than five years.
• Developing markets are becoming meaningful earnings drivers, with revenue up 55% in Nebraska and 47% in Georgia; Nevada revenue rose 17% and Louisiana added the Rice Palace Truck Stop Casino acquisition.
• Accel ended the quarter with $255 million of cash, net leverage of approximately 1.4 times, and an undrawn $300 million revolver, supporting acquisitions, organic investment, and continued share repurchases.
• Illinois growth is being driven by higher productivity rather than machine-count expansion, while Nevada hold per day declined 15.8% because of the rapid shift toward lower-yield convenience-store locations; management expects upgrades and loyalty initiatives to improve results over six to 12 months.

Accel Entertainment Stock Performance

Shares of ACEL stock traded down $0.08 during trading on Thursday, reaching $12.35. 87,185 shares of the company’s stock were exchanged, compared to its average volume of 350,149. Accel Entertainment has a twelve month low of $9.55 and a twelve month high of $14.00. The firm’s fifty day moving average price is $12.50 and its 200-day moving average price is $11.82. The company has a quick ratio of 2.64, a current ratio of 2.71 and a debt-to-equity ratio of 2.02. The stock has a market capitalization of $1.01 billion, a PE ratio of 18.45 and a beta of 1.02.

Insider Activity at Accel Entertainment

In related news, Director Bruce D. Wardinski purchased 50,000 shares of the firm’s stock in a transaction that occurred on Monday, May 11th. The shares were acquired at an average price of $11.55 per share, for a total transaction of $577,500.00. Following the purchase, the director owned 50,000 shares in the company, valued at approximately $577,500. This represents a ∞ increase in their ownership of the stock. The purchase was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, insider Derek Harmer sold 20,000 shares of the stock in a transaction dated Monday, June 15th. The shares were sold at an average price of $13.00, for a total transaction of $260,000.00. Following the completion of the transaction, the insider directly owned 187,827 shares in the company, valued at approximately $2,441,751. This represents a 9.62% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 57,931 shares of company stock valued at $734,353 over the last three months. Company insiders own 14.47% of the company’s stock.

Hedge Funds Weigh In On Accel Entertainment

Several institutional investors and hedge funds have recently made changes to their positions in ACEL. Engineers Gate Manager LP boosted its holdings in shares of Accel Entertainment by 8.7% during the 2nd quarter. Engineers Gate Manager LP now owns 11,960 shares of the company’s stock valued at $141,000 after acquiring an additional 956 shares in the last quarter. Cerity Partners LLC lifted its holdings in Accel Entertainment by 3.9% in the second quarter. Cerity Partners LLC now owns 30,763 shares of the company’s stock valued at $362,000 after buying an additional 1,145 shares during the period. The Manufacturers Life Insurance Company boosted its position in Accel Entertainment by 8.7% during the second quarter. The Manufacturers Life Insurance Company now owns 21,083 shares of the company’s stock valued at $248,000 after acquiring an additional 1,694 shares during the last quarter. Zacks Investment Management boosted its position in Accel Entertainment by 9.4% during the third quarter. Zacks Investment Management now owns 23,647 shares of the company’s stock valued at $262,000 after acquiring an additional 2,035 shares during the last quarter. Finally, MetLife Investment Management LLC grew its holdings in Accel Entertainment by 7.8% during the 4th quarter. MetLife Investment Management LLC now owns 29,035 shares of the company’s stock worth $331,000 after acquiring an additional 2,110 shares during the period. Institutional investors and hedge funds own 55.39% of the company’s stock.

Wall Street Analysts Forecast Growth

Several brokerages have commented on ACEL. Zacks Research downgraded shares of Accel Entertainment from a “strong-buy” rating to a “hold” rating in a research note on Friday, May 22nd. Citizens Jmp boosted their target price on Accel Entertainment from $14.00 to $15.00 and gave the company a “market outperform” rating in a research note on Wednesday. National Bank Financial set a $15.00 price objective on Accel Entertainment in a report on Wednesday. Citigroup reissued a “market outperform” rating on shares of Accel Entertainment in a research note on Wednesday. Finally, Weiss Ratings upgraded shares of Accel Entertainment from a “hold (c+)” rating to a “buy (b-)” rating in a report on Friday, June 26th. Four investment analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company’s stock. According to MarketBeat.com, Accel Entertainment currently has a consensus rating of “Moderate Buy” and an average target price of $15.00.

About Accel Entertainment

Accel Entertainment, Inc is a Chicago-based gaming and entertainment company specializing in the provision of regulated electronic gaming terminals and related management services to licensed establishments across the United States. The company’s core offerings include video gaming terminals (VGTs), digital payment solutions, player loyalty programs and compliance support, all designed to enhance customer engagement and operational efficiency for bars, restaurants, truck stops and convenience stores.

Founded in 2005, Accel Entertainment has built a network that spans multiple states, including Illinois, Pennsylvania, Ohio, and Iowa.