We found an interesting analysis on Caesars Entertainment, Inc. (CZR) on the No Deep Dives Substack from jefke. Let’s break down the bullish view on CZR.
As of January 13th, CZR was trading at $32.07, with trailing and forward price-to-earnings ratios of 11.30 and 27.40, respectively. Caesars is a big name in the casino and hospitality world. Despite its strong fundamentals, the stock has seen some ups and downs, currently hitting yearly lows.
What makes CZR stand out? It’s expected to see a significant boost in free cash flow starting in 2025. This shift comes from lower capital expenditures and a growing digital segment that’s starting to add more to its earnings. The company plans to buy back shares once it reaches its leverage targets, likely by late 2024. They’ve already made a small buyback after selling a non-core asset, showing they are taking steps to boost shareholder value.
However, the market isn’t fully convinced yet. Despite positive developments, investor sentiment still lags behind the company’s improving situation. The stock’s decline has influenced some investors’ views, leading to more uncertainty. This creates an interesting situation: even as fundamentals improve, the stock price drop seems to weigh on perceptions of value.
Currently, CZR is not among the 30 most popular stocks with hedge funds. By the end of the third quarter, 67 hedge funds held CZR, up from 54 in the previous quarter. While we see potential in CZR, we believe there are AI stocks that might offer better returns in a shorter time. If you’re interested in promising AI investments that trade at attractive earnings multiples, check out our report on the cheapest AI stocks.
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Caesars Entertainment, Inc., CZR, Caesars Entertainment, stock buybacks, stock performance
