Many stocks have been testing new highs in 2020, and one of the most notable is Scientific Games Corporation (SGMS). Currently, SGMS is trading at $19.76 and the avg recommendation for the stock is Moderate Buy. while the current analyst price target stands at $14.22.
To add more color to this target, the company’s high over the last year is $31.63 and the low is $3.76. Over the last 52 weeks, SGMS is down -37.53% while the S&P 500 is up 1.21%. The catalyst for this interesting swing was the company’s recent earnings report.
A Notable Earnings Report
In the last quarter, SGMS reported a profit of $431.0 million. Scientific Games Corporation also saw revenues increase to $725.0 million. In addition, SGMS has free cash flow of $67.0 million as of 03-2020 The company’s EBITDA came in at -$32.0 million which compares well with its peers.
SGMS booked profit margins of -8.10%, its Return on Equity (ROE) is 11.60%, and its Return on Assets is -3.40%. All told, it is clear that, SGMS needs to be on your watchlist.
About Scientific Games Corporation
If readers are unfamiliar, Scientific Games Corporation develops technology-based products and services, and related content for the gaming, lottery, social and digital gaming industries in the United States and internationally. The company’s Gaming segment sells new and used gaming machines, electronic table systems, video lottery terminals, conversion game kits, and spare parts; slot, casino, and table-management systems; table products, including shufflers; and perpetual licenses to proprietary table games. It also leases gaming machines; provides gaming operations and licensing arrangements; and installs and supports casino management systems, such as ongoing hardware and software maintenance and upgrade services of customer casino management systems. The company’s Lottery segment designs, prints, and sells instant lottery products; designs and manufactures instant games tickets; offers instant products planning, monitoring, management system, warehousing, inventory management, distribution, marketing, and game support functions; supplies player loyalty programs, merchandising services, and interactive marketing campaigns; and sublicenses brands for lottery products and lottery-related promotional products. It also provides software, hardware, and related services for lottery operations; and lottery systems software maintenance and support services. The company’s SciPlay segment sells virtual coins, chips, or bingo cards; and third-party branded games and original content through mobile and web platforms. Its Digital segment provides digital gaming and sports wagering solutions and services, including digital RMG and sports wagering solutions, distribution platforms, content, products, and services; software design, development, licensing, maintenance, and support services; Open Platform Systems; and content aggregation platforms. The company was founded in 1984 and is headquartered in Las Vegas, Nevada.
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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. SGMS has a short ratio of 4.18 and outstanding shares of 94.00M.
SGMS has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 2.19 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at -2.83. Scientific Games Corporation SGMS also noted assets of $7.46 billion at the end of the last quarter. Investors should also keep an eye on sector updates as SGMS has historically followed its peers on positive news.
All told, Scientific Games Corporation SGMS has strung together solid data and demonstrated underlying fundamentals. At its current valuation, SGMS represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.
Scientific Games Corporation SGMS is now commanding a market cap of 1.79B and a float of 55.94M. SGMS is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of SGMS stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in SGMS, either long or short, and we have not been compensated for this article.