Large Reversal in Caesars Entertainment After Earnings; Traders Bet on Online Gaming
Shares of leading gaming company Caesars Entertainment (NASDAQ: CZR) have staged a huge reversal on Tuesday after the company released its fiscal fourth-quarter earnings results after the closing bell on Monday.
The quarter was disappointing for Caesars as the company reported a large loss and missed Wall Street sales estimates.
In after hours trading on Monday, the stock was down around eight percent at one point and opened lower on Tuesday. Shares have been rising throughout the session, however, and were last trading up over five percent to $12.36 after opening at $10.80, for an intra-day move of more than 14 percent.
Investors are clearly looking past the company's fourth-quarter and are scooping up the stock on optimism surrounding Caesars' future online gambling prospects. In recent weeks, CZR has soared as both New Jersey and Nevada have moved to legalize online gaming. The stock has surged almost 53 percent in the last month and Tuesday's price action suggests that more gains could be ahead.
For the fourth-quarter, Caesars reported a net loss of $469.7 million. On a per share basis, the company lost $3.75 versus a loss of $220.6 million or $1.76 per share, in last year's corresponding quarter. Wall Street analysts had expected the company to report a loss of $1.73 per share.
Revenue for the period was down 4.3 percent to $2.02 billion, which came up short of analysts' consensus revenue estimates of $2.11 billion.
While the quarter was difficult from an operational standpoint, CZR is certainly a stock to watch. The huge reversal in the name on Tuesday suggests that traders think there is more upside in the name as the online gaming business could drive future growth at the company.
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