Top Casino Stocks To Watch For Q4 2020
With sports coming back into the spotlight, casino stocks are now back on investors’ radar. No doubt, the gambling industry is massive. And why are they massive? That’s because they are highly profitable, since the house always wins, duh. This could also be the reason why top casino stocks have been among the best stocks to buy for investors. However, that’s no longer the case especially when we are transitioning towards the “new normal”.
Big names casinos including Las Vegas Sands (LVS Stock Report) and Wynn Resorts (WYNN Stock Report) have suffered dramatic declines in revenues due to the COVID-19 pandemic this year. As many are now in the process of reopening, don’t take these stocks off your list just yet.
But if you are still skeptical about the vaccine developments, then you may want to consider the online betting market. This came as many people avoid large crowds to avoid the insidious virus. Recall that sports betting has only been legalized in the U.S. since 2018. The market is still very much in its nascency. There’s a huge opportunity for online casinos to scale up their businesses in a massive way. The top online casino stocks have only recently begun gaining traction this year. Investors looking for the next big thing may want to consider these online casino stocks moving forward.
Top Online Casino Stocks To Watch For Q4 2020: Penn National Gaming
First, up the list, shares of Penn National Gaming (PENN Stock Report) have climbed 7.6% on Thursday. This came after Sitfely analyst Steven Wieczynski reiterated a buy rating on PENN stock, in which his new target is now $85. His new target represents a potential gain of 16% from its Thursday closing of $73 per share.
As you may or may not know, the company owns and manages traditional gaming, racing properties, and operates video gaming terminals with an emphasis on slot machines. As this is the first week of the National Football league (NFL), many investors are anticipating that Penn stock could benefit immensely from its stake in Barstool Sports. Barstool is big with younger millennial bettors. With the recently launched mobile betting app from Barstool, the investment could pay off in more ways as the NFL season progresses.
Top Online Casino Stocks To Watch For Q4 2020: DraftKings
Shares of DraftKings (DKNG Stock Report) continued to move higher this week despite reaching an all-time high earlier this week. This comes after the company announced a deal with ESPN. This week’s surge follows the strong movement from last week, as investors bid DKNG stock higher in celebration of the return of the NFL. DraftKings has also secured another sports partnership, with an exclusive deal with the New York Giants. Under this deal, DraftKings will become the Giants’ official sports betting and daily fantasy sports partner. This further allows DraftKings to access team trademarks and logos, which could support efforts in developing the brand in the gambling arena.
At a valuation of almost 47 times trailing sales, DraftKings needs to achieve strong growth to justify the premium. Many investors believe the company will benefit from the increasing legalization of sports betting and international expansion. But the ESPN deal certainly helps DraftKings in acquiring new users. Nevertheless, the share price has already gone up so much this year. One should consider if the upside has been priced in.
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Top Online Casino Stocks To Watch For Q4 2020: GameAccount Network
The last online casino stock to watch is also the smallest on this list. GameAccount Network (GAN Stock Report) is a London based software-as-a-service solutions provider for companies who wish to enter the online gambling space. The company’s business model has been likened to Shopify’s (SHOP Stock Report) as it allows physical casino operators to easily take their gambling business online. The customers include large regional operators and individual tribal casino operators. The beauty of GAN is that you don’t have to bet on the success of anyone’s operator in particular. Rather, you are betting on online casinos as a whole.
On August 20th, GAN reported its second-quarter financial results for 2020. These results included that revenue had increased 99% year over year. There was additionally a 110% increase in real money internet gambling revenue to $5.7 million. If you are hopeful that online casinos will proliferate, GAN stock would be one of the best online casino stocks to watch. This comes as more operators intend to shift or expand their operations online.