Investment Thesis
Boyd Gaming exhibits concerning financial health marked by negative free cash flow (-$20.8M), dangerously low liquidity ratios (current ratio 0.60x), and high leverage ($2.3B debt) that constrains financial flexibility. Despite respectable 16.4% operating margins and 4.1% revenue growth, the company's weak capital efficiency (ROE 4.2%, ROA 1.6%) and nearly flat net income growth (0.2%) reveal deteriorating operational profitability and poor returns on invested capital.
Strengths
- Operating margin of 16.4% is solid for capital-intensive hospitality sector
- Revenue growth of 4.1% YoY demonstrates resilient demand and market position
- Operating cash flow of $134.3M provides near-term liquidity from core operations
Risks
- Negative free cash flow (-$20.8M) indicates capital spending ($155.2M) exceeds cash generation capacity, constraining debt paydown ability
- Current ratio of 0.60x and quick ratio of 0.58x signal acute liquidity stress with $2.3B long-term debt obligation
- Net income growth of only 0.2% despite 4.1% revenue growth reveals operational margin compression and deteriorating profitability conversion
- ROE of 4.2% and ROA of 1.6% represent severely inadequate returns on invested capital and shareholder equity
- Debt/Equity ratio of 0.90x combined with interest coverage of 3.9x provides limited safety margin if business weakens
Key Metrics to Watch
- Free cash flow trend and capital expenditure moderation
- Current ratio and working capital position stability
- Net profit margin trajectory and operating expense control
- Debt-to-EBITDA ratio and debt reduction progress
Financial Metrics
Revenue
997.4M
Net Income
105.5M
EPS (Diluted)
$1.37
Free Cash Flow
-20.8M
Total Assets
6.6B
Cash
372.7M
Profitability Ratios
Gross Margin
N/A
Operating Margin
16.4%
Net Margin
10.6%
ROE
4.2%
ROA
1.6%
FCF Margin
-2.1%
Balance Sheet & Liquidity
Current Ratio
0.60x
Quick Ratio
0.58x
Debt/Equity
0.90x
Debt/Assets
0.0%
Interest Coverage
3.88x
Long-term Debt
2.3B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-06T11:40:35.672205 |
Data as of: 2026-03-31 |
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