Since September 2020, the S&P 500 has delivered a total return of 94.8%. But one standout stock has more than doubled the market - over the past five years, Boyd Gaming has surged 203% to $85.34 per share. Its momentum hasn’t stopped as it’s also gained 28.6% in the last six months thanks to its solid quarterly results, beating the S&P by 12.6%.
Is there a buying opportunity in Boyd Gaming, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.
Why Do We Think Boyd Gaming Will Underperform?
We’re glad investors have benefited from the price increase, but we're cautious about Boyd Gaming. Here are three reasons there are better opportunities than BYD and a stock we'd rather own.
1. Long-Term Revenue Growth Disappoints
A company’s long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Boyd Gaming’s 9.6% annualized revenue growth over the last five years was tepid. This was below our standard for the consumer discretionary sector.
2. Revenue Projections Show Stormy Skies Ahead
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 drop by 12.1%, a decrease from its 9.6% annualized growth for the past five years. This projection doesn't excite us and implies its products and services will see some demand headwinds.
3. New Investments Fail to Bear Fruit as ROIC Declines
A company’s ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity).
We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, Boyd Gaming’s ROIC averaged 3.9 percentage point decreases each year. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between.
Final Judgment
Boyd Gaming falls short of our quality standards. With its shares beating the market recently, the stock trades at 12.8× forward P/E (or $85.34 per share). This valuation is reasonable, but the company’s shaky fundamentals present too much downside risk. There are more exciting stocks to buy at the moment. We’d suggest looking at one of our all-time favorite software stocks.
Stocks We Like More Than Boyd Gaming
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
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