Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Rush Street Interactive (NYSE: RSI) and the best and worst performers in the gaming solutions industry.
Gaming solution companies operate in a dynamic and evolving market, and the digital transformation of the gaming industry presents significant opportunities for innovation and growth, whether it be immersive slot machine terminals or mobile sports betting. However, the gaming solution industry is not without its challenges. Regulatory compliance is a crucial consideration as companies must navigate a complex and often fragmented regulatory landscape across different jurisdictions. Changes in regulations can impact product offerings, operational practices, and market access, requiring companies to maintain flexibility and adaptability in their business strategies. Additionally, the competitive nature of the industry necessitates continuous investment in research and development to stay ahead of competitors and meet evolving consumer demands.
The 7 gaming solutions stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 2.2%.
In light of this news, share prices of the companies have held steady as they are up 4.1% on average since the latest earnings results.
Best Q2: Rush Street Interactive (NYSE: RSI)
Specializing in online casino gaming and sports betting, Rush Street Interactive (NYSE: RSI) is an operator of digital gaming platforms.
Rush Street Interactive reported revenues of $269.2 million, up 22.2% year on year. This print exceeded analysts’ expectations by 7.6%. Overall, it was a stunning quarter for the company with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Rush Street Interactive pulled off the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 38.7% since reporting and currently trades at $22.25.
Is now the time to buy Rush Street Interactive? Access our full analysis of the earnings results here, it’s free.
DraftKings (NASDAQ: DKNG)
Getting its start in daily fantasy sports, DraftKings (NASDAQ: DKNG) is a digital sports entertainment and gaming company.
DraftKings reported revenues of $1.51 billion, up 36.9% year on year, outperforming analysts’ expectations by 5.9%. The business had a strong quarter with a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EBITDA estimates.
DraftKings achieved the fastest revenue growth among its peers. The company reported 3.3 million users, up 6.5% year on year. The market seems happy with the results as the stock is up 6.2% since reporting. It currently trades at $48.18.
Is now the time to buy DraftKings? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Light & Wonder (NASDAQ: LNW)
With names as crazy as Ultimate Fire Link Power 4 for its products, Light & Wonder (NASDAQ: LNW) is a gaming company supplying the casino industry with slot machines, table games, and digital games.
Light & Wonder reported revenues of $809 million, down 1.1% year on year, falling short of analysts’ expectations by 4.4%. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates and a miss of analysts’ iGaming revenue estimates.
Light & Wonder delivered the weakest performance against analyst estimates in the group. The stock is flat since the results and currently trades at $91.05.
Read our full analysis of Light & Wonder’s results here.
Accel Entertainment (NYSE: ACEL)
Established in Illinois, Accel Entertainment (NYSE: ACEL) is a provider of electronic gaming machines and interactive amusement terminals to bars and entertainment venues.
Accel Entertainment reported revenues of $335.9 million, up 8.6% year on year. This number beat analysts’ expectations by 1%. More broadly, it was a satisfactory quarter as it also logged a beat of analysts’ EPS estimates but a miss of analysts’ adjusted operating income estimates.
The stock is down 6.5% since reporting and currently trades at $11.59.
Read our full, actionable report on Accel Entertainment here, it’s free.
PlayStudios (NASDAQ: MYPS)
Founded by a team of former gaming industry executives, PlayStudios (NASDAQ: MYPS) offers free-to-play digital casino games.
PlayStudios reported revenues of $59.34 million, down 18.3% year on year. This result came in 2.8% below analysts' expectations. Zooming out, it was a mixed quarter as it also produced full-year revenue guidance beating analysts’ expectations but a miss of analysts’ daily active users estimates.
PlayStudios achieved the highest full-year guidance raise but had the slowest revenue growth among its peers. The company reported 2.35 million monthly active users, down 27.1% year on year. The stock is down 12.1% since reporting and currently trades at $0.97.
Read our full, actionable report on PlayStudios here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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