What Happened?
Shares of gaming, betting and entertainment company Bally's Corporation (NYSE: BALY) fell 4.9% in the afternoon session after investors reacted to a competitor's weak earnings report and reports highlighting Bally's own highly leveraged business model. The negative sentiment was compounded by news from rival Caesars Entertainment, which missed Wall Street's revenue and earnings expectations, suggesting potential softness in the leisure market. Specific to Bally's, the company faced scrutiny for its debt-heavy operations, with total debt reported at $5.74 billion.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Bally's? Access our full analysis report here.
What Is The Market Telling Us
Bally’s shares are extremely volatile and have had 65 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 8 days ago when the stock gained 23.5% on the news that Truist Securities raised its price target on the stock, pointing to an improved company outlook. The investment firm increased its price target to $13.00 from $11.00 but kept a 'Hold' rating. The more positive view on Bally's followed recent business developments. The company obtained partial consent from lenders to sell its Lincoln, Rhode Island asset. Bally's also completed the sale of its international interactive business, which generated approximately $1.0 billion in after-tax cash. The company planned to use these proceeds for paying down debt and other purposes, which helped improve its financial outlook.
Bally's is down 4.8% since the beginning of the year, and at $18.51 per share, it is trading 16.1% below its 52-week high of $22.07 from November 2024.
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