Monarch Casino & Resort Inc (NASDAQ: MCRI)

Sector: Consumer Cyclical Industry: Resorts & Casinos CIK: 0000907242
Market Cap 1.77 Bn
P/B 3.44
P/E 20.35
P/S 3.42
ROIC (Qtr) 14.82
Div Yield % 1.60
Rev 1y % (Qtr) 3.58
Total Debt (Qtr) 13.56 Mn
Debt/Equity (Qtr) 0.02
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About

Monarch Casino & Resort, Inc., or MCRI, operates in the gaming industry, specifically in the casino and resort sector. The company's main business activities encompass casino gaming, hotel operations, food and beverage services, and entertainment. Monarch Casino & Resort, Inc. oversees two primary properties: the Atlantis Casino Resort Spa in Reno, Nevada, and the Monarch Casino Resort Spa Black Hawk in Black Hawk, Colorado. The Atlantis Casino Resort Spa is a expansive 61,000-square-foot casino featuring more than 1,200 slot machines, 33 table...

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Investment thesis

Bull case

  • Strong operating cash flow of 164.41M provides robust 12.13x coverage of total debt 13.56M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 107.64M provide 106.05x coverage of short-term debt 1.01M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 698.55M provides 51.53x coverage of total debt 13.56M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 164.41M provides strong 19.68x coverage of stock compensation 8.36M, indicating sustainable incentive practices.
  • Strong operating cash flow of 164.41M provides 1.50x coverage of SG&A expenses 109.32M, showing efficient operational cost management.

Bear case

  • Operating cash flow of 164.41M barely covers its investment activities of (43.24M), with a coverage ratio of -3.80, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 164.41M provides thin coverage of dividend payments of (22.06M) with a -7.45 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating earnings of 102.29M show weak coverage of depreciation charges of 54.19M, with a 1.89 ratio indicating high capital intensity and potential reinvestment needs.
  • High financing cash flow of (52.92M) relative to working capital of (6.22M), which is 8.50x suggests concerning dependence on external funding for operational needs.
  • Free cash flow of 122.52M represents just -17.50x of debt issuance (7M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Products and Services Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Resorts & Casinos
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 LVS Las Vegas Sands Corp 39.82 Bn 24.48 3.06 15.78 Bn
2 WYNN Wynn Resorts Ltd 20.12 Bn 2,860.00 4.09 12.20 Bn
3 MGM MGM Resorts International 9.16 Bn 44.51 0.52 31.26 Bn
4 BYD Boyd Gaming Corp 8.33 Bn -92.47 2.92 2.46 Bn
5 MTN Vail Resorts Inc 4.91 Bn 196.79 4.35 3.38 Bn
6 HGV Hilton Grand Vacations Inc. 4.44 Bn 83.82 0.89 7.28 Bn
7 CZR Caesars Entertainment, Inc. 3.93 Bn -7.83 0.34 24.88 Bn
8 RRR Red Rock Resorts, Inc. 3.66 Bn 20.78 2.12 3.41 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.44 1.18
EV to Cash from Ops. EV/CFO 12.50 39.36
EV to Debt EV to Debt 130.50 32.02
EV to EBIT EV/EBIT 15.52 44.55
EV to EBITDA EV/EBITDA 10.78 19.91
EV to Free Cash Flow [EV/FCF] EV/FCF 19.88 -82.04
EV to Market Cap EV to Market Cap 1.00 4.40
EV to Revenue EV/Rev 3.43 4.33
Price to Book Value [P/B] P/B 3.44 3.49
Price to Earnings [P/E] P/E 20.35 199.09
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 3.75 2.40
Dividend Payout Ratio % Div Payout % (Qtr) 26.50 38.73
Dividend per Basic Share Div per Share (Qtr) 1.20 1.07
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 17.92 21.58
Interest Coverage Int. cover (Qtr) -66.95 -1.90
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 20.30 7.02
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 173.33 3.69
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 6.21
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -6.33 -15.96
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -4.67 -13.29
EBIT Growth (1y) % EBIT 1y % (Qtr) -10.26 -1.32
EBT Growth (1y) % EBT 1y % (Qtr) -8.72 -10.90
EPS Growth (1y) % EPS 1y % (Qtr) -1.74 9.03
FCF Growth (1y) % FCF 1y % (Qtr) 37.69 81.04
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 6.53 4.33
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.74 0.49
Cash Payout Ratio Cash Payout (Qtr) 0.11 0.11
Cash Ratio Cash Ratio (Qtr) 0.77 0.59
Current Ratio Curr Ratio (Qtr) 0.96 0.90
Debt to Equity Ratio Debt/Equity (Qtr) 0.02 4.57
Interest Cover Ratio Int Coverage (Qtr) -66.95 -1.90
Times Interest Earned Times Interest Earned (Qtr) -66.95 -1.90
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 29.00 18.45
EBIT Margin % EBIT Margin % (Qtr) 18.96 11.71
EBT Margin % EBT Margin % (Qtr) 19.24 4.06
Gross Margin % Gross Margin % (Qtr) 57.00 47.91
Net Profit Margin % Net Margin % (Qtr) 15.30 2.46