Boyd Gaming currently trades at $69.26 and has been a dream stock for shareholders. It’s returned 497% since March 2020, more than tripling the S&P 500’s 149% gain. The company has also beaten the index over the past six months as its stock price is up 8.2% thanks to its solid quarterly results.
Is there a buying opportunity in Boyd Gaming, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free.
Despite the momentum, we're swiping left on Boyd Gaming for now. Here are three reasons why we avoid BYD and a stock we'd rather own.
Why Is Boyd Gaming Not Exciting?
Run by the Boyd family, Boyd Gaming (NYSE:BYD) is a diversified operator of gaming entertainment properties across the United States, offering casino games, hotel accommodations, and dining.
1. Long-Term Revenue Growth Disappoints
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Boyd Gaming’s 3.4% annualized revenue growth over the last five years was sluggish. This fell short of our benchmark for the consumer discretionary sector. 
2. Projected Revenue Growth Shows Limited Upside
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect Boyd Gaming’s revenue to stall, a deceleration versus its 5.1% annualized growth for the past two years. This projection doesn't excite us and indicates its products and services will see some demand headwinds.
3. Cash Flow Margin Set to Decline
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
Over the next year, analysts predict Boyd Gaming’s cash conversion will fall. Their consensus estimates imply its free cash flow margin of 14.2% for the last 12 months will decrease to 10.8%.
Final Judgment
Boyd Gaming isn’t a terrible business, but it doesn’t pass our quality test. With its shares outperforming the market lately, the stock trades at 10.4× forward price-to-earnings (or $69.26 per share). While this valuation is reasonable, we don’t really see a big opportunity at the moment. We're pretty confident there are superior stocks to buy right now. We’d suggest looking at a dominant Aerospace business that has perfected its M&A strategy.
Stocks We Like More Than Boyd Gaming
The Trump trade may have passed, but rates are still dropping and inflation is still cooling. Opportunities are ripe for those ready to act - and we’re here to help you pick them.
Get started by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.