Everi Holdings Inc

Everi Holdings Inc. (NYE: EVRI) is a supplier of imaginative entertainment and technology solutions for the casino and digital gaming industry. The Company develops entertaining game content and gaming machines, gaming systems and services for land-based and iGaming operators. It operates through two segments: Games and Financial Technology Solutions (FinTech).

Recent Financial and Business Updates:

Third Quarter 2023 Financial Overview

• Revenues and Acquisitions: Everi reported third-quarter revenues of USD 206.6 million, a marginal increase from the previous year. Acquisitions contributed USD 8.1 million to this figure. Recurring revenues saw a 7% growth, driven by the Games and FinTech segments. However, one-time sales declined to USD 52.3 million due to decreases in gaming equipment and FinTech hardware sales.
• Operating Performance: Operating income witnessed a 4% decline to USD 52.4 million, primarily due to higher operating expenses and depreciation related to recent acquisitions. Net income also decreased to USD 26.6 million, or USD 0.29 per diluted share, in comparison to USD 29.4 million in the third quarter of 2022. Adjusted EBITDA was USD 96.2 million, slightly lower than the previous year.
• Free Cash Flow: Free Cash Flow for the quarter amounted to USD 34.3 million, impacted by discrete capital expenditures for the new consolidated production facility and higher net cash interest payments.
• Outlook: Everi adjusted its outlook for 2023, expecting Adjusted EBITDA to align with the prior year. Net income, EPS, Free Cash Flow, and Adjusted EPS are projected to be at the lower end of the guidance ranges due to lower operating income, offset by reduced net interest expense, lower taxes, and lower capital expenditures.
• Games Segment Highlights (Q3 2023): Games segment revenues decreased to USD 111.5 million, reflecting a 12% decrease in gaming equipment and systems sales but offset by a 5% increase in gaming operations revenues. Operating income for the Games segment was USD 21.4 million, down from USD 25.8 million in the third quarter of 2022.
• Financial Technology Solutions ("FinTech") Segment Highlights (Q3 2023): FinTech revenues for Q3 2023 increased by 4% to USD 95.1 million, driven by gains in software and other revenues and financial access services. However, there was a 20% decline in hardware sales. Operating income in the FinTech segment grew by 8% to USD 31.0 million.
• Balance Sheet, Liquidity, and Cash Flow: As of September 30, 2023, Everi held USD 209.4 million in cash and cash equivalents, with a Net Cash Position of USD 38.0 million. Total debt decreased to USD 986.5 million.
• Share Repurchases: The company repurchased 2.4 million shares for USD 33.9 million during the quarter, with USD 106.1 million remaining available under the current USD 180 million share repurchase authorization.

Technical Observation (on the daily chart)

The Relative Strength Index (RSI), calculated over a 14-day span, stands at 39.49, currently recovering from oversold zone, signifying the likelihood of either more consolidation or a brief surge soon. Adding to this, the stock presently finds itself positioned beneath both the 21-day and 50-day Simple Moving Averages (SMA), which could function as a dynamic short-term resistance levels. Now, the stock's price hovers around a crucial resistance range of USD 11.00 to USD 11.50, with an anticipation of an impending upward shift originating in case of a break on the upside of these levels. 

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to Everi Holdings Inc. (NYE: EVRI) at the current market price of USD 10.64 as of November 27, 2023, 07:50 am PST. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The orange colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is November 27, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.