Intrinsic value of Eldorado Resorts - ERI

Previous Close

$33.60

  Intrinsic Value

$22.42

stock screener

  Rating & Target

sell

-33%

Previous close

$33.60

 
Intrinsic value

$22.42

 
Up/down potential

-33%

 
Rating

sell

We calculate the intrinsic value of ERI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  24.03
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  893
  1,429
  2,207
  3,301
  4,790
  6,758
  9,291
  12,471
  16,375
  21,071
  26,614
  33,049
  40,405
  48,702
  57,946
  68,134
  79,256
  91,296
  104,235
  118,051
  132,725
  148,236
  164,569
  181,711
  199,654
  218,396
  237,939
  258,291
  279,466
  301,484
  324,368
Variable operating expenses, $m
 
  1,215
  1,873
  2,798
  4,057
  5,721
  7,862
  10,551
  13,852
  17,822
  22,509
  27,943
  34,162
  41,177
  48,993
  57,607
  67,011
  77,191
  88,130
  99,812
  112,219
  125,333
  139,142
  153,636
  168,807
  184,653
  201,177
  218,384
  236,288
  254,904
  274,252
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  804
  1,215
  1,873
  2,798
  4,057
  5,721
  7,862
  10,551
  13,852
  17,822
  22,509
  27,943
  34,162
  41,177
  48,993
  57,607
  67,011
  77,191
  88,130
  99,812
  112,219
  125,333
  139,142
  153,636
  168,807
  184,653
  201,177
  218,384
  236,288
  254,904
  274,252
Operating income, $m
  89
  214
  334
  503
  733
  1,037
  1,429
  1,920
  2,523
  3,249
  4,105
  5,106
  6,243
  7,525
  8,953
  10,527
  12,245
  14,105
  16,105
  18,239
  20,506
  22,903
  25,426
  28,075
  30,847
  33,743
  36,762
  39,907
  43,178
  46,580
  50,116
EBITDA, $m
  152
  316
  488
  729
  1,058
  1,493
  2,053
  2,755
  3,618
  4,655
  5,880
  7,301
  8,926
  10,759
  12,801
  15,052
  17,509
  20,169
  23,028
  26,080
  29,322
  32,748
  36,357
  40,144
  44,108
  48,248
  52,565
  57,062
  61,740
  66,604
  71,659
Interest expense (income), $m
  48
  46
  81
  131
  201
  297
  424
  587
  792
  1,043
  1,346
  1,703
  2,117
  2,591
  3,125
  3,721
  4,377
  5,093
  5,869
  6,702
  7,592
  8,537
  9,536
  10,588
  11,692
  12,848
  14,055
  15,314
  16,625
  17,989
  19,407
Earnings before tax, $m
  38
  168
  254
  373
  532
  740
  1,005
  1,333
  1,731
  2,205
  2,759
  3,403
  4,125
  4,933
  5,827
  6,806
  7,868
  9,012
  10,236
  11,537
  12,914
  14,366
  15,890
  17,486
  19,155
  20,895
  22,707
  24,593
  26,553
  28,591
  30,709
Tax expense, $m
  13
  45
  69
  101
  144
  200
  271
  360
  467
  595
  745
  919
  1,114
  1,332
  1,573
  1,838
  2,124
  2,433
  2,764
  3,115
  3,487
  3,879
  4,290
  4,721
  5,172
  5,642
  6,131
  6,640
  7,169
  7,720
  8,291
Net income, $m
  25
  123
  185
  272
  388
  540
  734
  973
  1,264
  1,610
  2,014
  2,484
  3,012
  3,601
  4,254
  4,968
  5,744
  6,579
  7,472
  8,422
  9,427
  10,487
  11,600
  12,765
  13,983
  15,253
  16,576
  17,953
  19,384
  20,872
  22,418

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  61
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,294
  1,973
  3,049
  4,560
  6,616
  9,334
  12,833
  17,225
  22,618
  29,103
  36,760
  45,647
  55,808
  67,268
  80,035
  94,107
  109,469
  126,100
  143,971
  163,055
  183,322
  204,746
  227,305
  250,982
  275,765
  301,652
  328,645
  356,756
  386,003
  416,414
  448,022
Adjusted assets (=assets-cash), $m
  1,233
  1,973
  3,049
  4,560
  6,616
  9,334
  12,833
  17,225
  22,618
  29,103
  36,760
  45,647
  55,808
  67,268
  80,035
  94,107
  109,469
  126,100
  143,971
  163,055
  183,322
  204,746
  227,305
  250,982
  275,765
  301,652
  328,645
  356,756
  386,003
  416,414
  448,022
Revenue / Adjusted assets
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
Average production assets, $m
  1,110
  1,775
  2,742
  4,100
  5,949
  8,393
  11,539
  15,489
  20,338
  26,170
  33,055
  41,046
  50,183
  60,488
  71,968
  84,622
  98,436
  113,390
  129,460
  146,620
  164,844
  184,109
  204,394
  225,685
  247,970
  271,248
  295,520
  320,798
  347,097
  374,443
  402,865
Working capital, $m
  0
  -90
  -139
  -208
  -302
  -426
  -585
  -786
  -1,032
  -1,327
  -1,677
  -2,082
  -2,546
  -3,068
  -3,651
  -4,292
  -4,993
  -5,752
  -6,567
  -7,437
  -8,362
  -9,339
  -10,368
  -11,448
  -12,578
  -13,759
  -14,990
  -16,272
  -17,606
  -18,993
  -20,435
Total debt, $m
  800
  1,391
  2,255
  3,470
  5,123
  7,309
  10,121
  13,653
  17,989
  23,203
  29,359
  36,504
  44,674
  53,887
  64,152
  75,466
  87,817
  101,188
  115,557
  130,900
  147,195
  164,420
  182,557
  201,593
  221,519
  242,332
  264,034
  286,636
  310,151
  334,601
  360,014
Total liabilities, $m
  996
  1,587
  2,451
  3,666
  5,319
  7,505
  10,317
  13,849
  18,185
  23,399
  29,555
  36,700
  44,870
  54,083
  64,348
  75,662
  88,013
  101,384
  115,753
  131,096
  147,391
  164,616
  182,753
  201,789
  221,715
  242,528
  264,230
  286,832
  310,347
  334,797
  360,210
Total equity, $m
  298
  387
  598
  894
  1,297
  1,830
  2,515
  3,376
  4,433
  5,704
  7,205
  8,947
  10,938
  13,184
  15,687
  18,445
  21,456
  24,716
  28,218
  31,959
  35,931
  40,130
  44,552
  49,192
  54,050
  59,124
  64,414
  69,924
  75,657
  81,617
  87,812
Total liabilities and equity, $m
  1,294
  1,974
  3,049
  4,560
  6,616
  9,335
  12,832
  17,225
  22,618
  29,103
  36,760
  45,647
  55,808
  67,267
  80,035
  94,107
  109,469
  126,100
  143,971
  163,055
  183,322
  204,746
  227,305
  250,981
  275,765
  301,652
  328,644
  356,756
  386,004
  416,414
  448,022
Debt-to-equity ratio
  2.685
  3.600
  3.770
  3.880
  3.950
  3.990
  4.020
  4.040
  4.060
  4.070
  4.070
  4.080
  4.080
  4.090
  4.090
  4.090
  4.090
  4.090
  4.100
  4.100
  4.100
  4.100
  4.100
  4.100
  4.100
  4.100
  4.100
  4.100
  4.100
  4.100
  4.100
Adjusted equity ratio
  0.192
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196
  0.196

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  25
  123
  185
  272
  388
  540
  734
  973
  1,264
  1,610
  2,014
  2,484
  3,012
  3,601
  4,254
  4,968
  5,744
  6,579
  7,472
  8,422
  9,427
  10,487
  11,600
  12,765
  13,983
  15,253
  16,576
  17,953
  19,384
  20,872
  22,418
Depreciation, amort., depletion, $m
  63
  102
  153
  226
  325
  456
  624
  835
  1,094
  1,406
  1,774
  2,195
  2,684
  3,235
  3,849
  4,525
  5,264
  6,064
  6,923
  7,841
  8,815
  9,845
  10,930
  12,069
  13,260
  14,505
  15,803
  17,155
  18,561
  20,024
  21,544
Funds from operations, $m
  85
  224
  339
  498
  713
  996
  1,357
  1,808
  2,358
  3,016
  3,789
  4,679
  5,695
  6,836
  8,102
  9,494
  11,008
  12,642
  14,395
  16,263
  18,243
  20,332
  22,530
  24,834
  27,243
  29,758
  32,379
  35,108
  37,945
  40,895
  43,961
Change in working capital, $m
  -13
  -34
  -49
  -69
  -94
  -124
  -160
  -200
  -246
  -296
  -349
  -405
  -463
  -523
  -582
  -642
  -701
  -759
  -815
  -870
  -924
  -977
  -1,029
  -1,080
  -1,130
  -1,181
  -1,231
  -1,282
  -1,334
  -1,387
  -1,442
Cash from operations, $m
  98
  258
  388
  567
  807
  1,120
  1,517
  2,008
  2,604
  3,312
  4,138
  5,085
  6,159
  7,359
  8,685
  10,135
  11,708
  13,401
  15,210
  17,133
  19,167
  21,310
  23,559
  25,914
  28,374
  30,939
  33,610
  36,390
  39,279
  42,282
  45,403
Maintenance CAPEX, $m
  0
  -59
  -95
  -147
  -219
  -318
  -449
  -617
  -828
  -1,088
  -1,399
  -1,768
  -2,195
  -2,684
  -3,235
  -3,849
  -4,525
  -5,264
  -6,064
  -6,923
  -7,841
  -8,815
  -9,845
  -10,930
  -12,069
  -13,260
  -14,505
  -15,803
  -17,155
  -18,561
  -20,024
New CAPEX, $m
  -47
  -665
  -967
  -1,359
  -1,849
  -2,444
  -3,146
  -3,950
  -4,849
  -5,832
  -6,885
  -7,992
  -9,137
  -10,304
  -11,481
  -12,654
  -13,814
  -14,954
  -16,070
  -17,160
  -18,224
  -19,265
  -20,285
  -21,290
  -22,285
  -23,277
  -24,272
  -25,278
  -26,300
  -27,346
  -28,422
Cash from investing activities, $m
  -41
  -724
  -1,062
  -1,506
  -2,068
  -2,762
  -3,595
  -4,567
  -5,677
  -6,920
  -8,284
  -9,760
  -11,332
  -12,988
  -14,716
  -16,503
  -18,339
  -20,218
  -22,134
  -24,083
  -26,065
  -28,080
  -30,130
  -32,220
  -34,354
  -36,537
  -38,777
  -41,081
  -43,455
  -45,907
  -48,446
Free cash flow, $m
  57
  -466
  -674
  -938
  -1,261
  -1,642
  -2,078
  -2,558
  -3,073
  -3,608
  -4,146
  -4,675
  -5,173
  -5,629
  -6,030
  -6,367
  -6,631
  -6,817
  -6,924
  -6,950
  -6,898
  -6,771
  -6,572
  -6,307
  -5,980
  -5,599
  -5,167
  -4,691
  -4,175
  -3,625
  -3,043
Issuance/(repayment) of debt, $m
  -69
  596
  865
  1,215
  1,653
  2,185
  2,813
  3,532
  4,336
  5,215
  6,156
  7,146
  8,169
  9,213
  10,265
  11,314
  12,351
  13,371
  14,369
  15,343
  16,295
  17,225
  18,137
  19,036
  19,926
  20,813
  21,702
  22,601
  23,515
  24,450
  25,413
Issuance/(repurchase) of shares, $m
  0
  22
  26
  24
  15
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -74
  618
  891
  1,239
  1,668
  2,185
  2,813
  3,532
  4,336
  5,215
  6,156
  7,146
  8,169
  9,213
  10,265
  11,314
  12,351
  13,371
  14,369
  15,343
  16,295
  17,225
  18,137
  19,036
  19,926
  20,813
  21,702
  22,601
  23,515
  24,450
  25,413
Total cash flow (excl. dividends), $m
  -17
  151
  216
  301
  407
  543
  735
  973
  1,263
  1,607
  2,010
  2,471
  2,996
  3,584
  4,235
  4,947
  5,721
  6,554
  7,445
  8,393
  9,397
  10,455
  11,566
  12,729
  13,945
  15,214
  16,535
  17,910
  19,340
  20,826
  22,370
Retained Cash Flow (-), $m
  -27
  -145
  -211
  -296
  -403
  -533
  -686
  -861
  -1,057
  -1,271
  -1,501
  -1,742
  -1,992
  -2,246
  -2,502
  -2,758
  -3,011
  -3,260
  -3,503
  -3,740
  -3,972
  -4,199
  -4,422
  -4,641
  -4,858
  -5,074
  -5,291
  -5,510
  -5,733
  -5,961
  -6,195
Prev. year cash balance distribution, $m
 
  56
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  63
  5
  4
  4
  10
  49
  112
  206
  336
  509
  729
  1,005
  1,338
  1,732
  2,189
  2,710
  3,294
  3,942
  4,653
  5,424
  6,255
  7,144
  8,089
  9,088
  10,140
  11,245
  12,400
  13,607
  14,865
  16,175
Discount rate, %
 
  10.10
  10.61
  11.14
  11.69
  12.28
  12.89
  13.53
  14.21
  14.92
  15.67
  16.45
  17.27
  18.14
  19.05
  20.00
  21.00
  22.05
  23.15
  24.31
  25.52
  26.80
  28.14
  29.55
  31.02
  32.57
  34.20
  35.91
  37.71
  39.59
  41.57
PV of cash for distribution, $m
 
  57
  4
  3
  2
  6
  24
  46
  71
  96
  119
  137
  148
  153
  151
  142
  128
  111
  93
  75
  58
  43
  31
  21
  14
  9
  5
  3
  2
  1
  0
Current shareholders' claim on cash, %
  100
  98.9
  98.2
  97.7
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5
  97.5

Eldorado Resorts, Inc. is a gaming and hospitality company that owns and operates gaming facilities located in Ohio, Louisiana, Nevada, Pennsylvania and West Virginia. The Company's segments are Nevada, Louisiana, Eastern and Corporate. As of May 1, 2017, the Company owned and operated approximately 503,000 square feet of casino space with approximately 20,000 slot machines and video lottery terminals (VLTs), over 550 table and poker games, 45 restaurants and 6,500 hotel rooms. As of December 31, 2016, the Company owned and operated various properties, including Eldorado Resort Casino Reno (Eldorado Reno), Silver Legacy Resort Casino (Silver Legacy), Circus Circus Reno (Circus Reno), Eldorado Resort Casino Shreveport (Eldorado Shreveport), Mountaineer Casino, Racetrack & Resort (Mountaineer), Presque Isle Downs & Casino (Presque Isle Downs), and Eldorado Gaming Scioto Downs (Scioto Downs).

FINANCIAL RATIOS  of  Eldorado Resorts (ERI)

Valuation Ratios
P/E Ratio 63.3
Price to Sales 1.8
Price to Book 5.3
Price to Tangible Book
Price to Cash Flow 16.2
Price to Free Cash Flow 31
Growth Rates
Sales Growth Rate 24%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 27%
Cap. Spend. - 3 Yr. Gr. Rate 46.4%
Financial Strength
Quick Ratio 12
Current Ratio 0
LT Debt to Equity 266.8%
Total Debt to Equity 268.5%
Interest Coverage 2
Management Effectiveness
Return On Assets 4.3%
Ret/ On Assets - 3 Yr. Avg. 9.9%
Return On Total Capital 2.2%
Ret/ On T. Cap. - 3 Yr. Avg. 3.6%
Return On Equity 8.8%
Return On Equity - 3 Yr. Avg. 16.8%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 37.3%
Gross Margin - 3 Yr. Avg. 36.9%
EBITDA Margin 16.7%
EBITDA Margin - 3 Yr. Avg. 16.7%
Operating Margin 10%
Oper. Margin - 3 Yr. Avg. 9.9%
Pre-Tax Margin 4.3%
Pre-Tax Margin - 3 Yr. Avg. 2.3%
Net Profit Margin 2.8%
Net Profit Margin - 3 Yr. Avg. 4.9%
Effective Tax Rate 34.2%
Eff/ Tax Rate - 3 Yr. Avg. -42.3%
Payout Ratio 0%

ERI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ERI stock intrinsic value calculation we used $893 million for the last fiscal year's total revenue generated by Eldorado Resorts. The default revenue input number comes from 2016 income statement of Eldorado Resorts. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ERI stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 10.1%, whose default value for ERI is calculated based on our internal credit rating of Eldorado Resorts, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Eldorado Resorts.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ERI stock the variable cost ratio is equal to 85.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ERI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.8% for Eldorado Resorts.

Corporate tax rate of 27% is the nominal tax rate for Eldorado Resorts. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ERI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ERI are equal to 124.2%.

Life of production assets of 18.7 years is the average useful life of capital assets used in Eldorado Resorts operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ERI is equal to -6.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $298 million for Eldorado Resorts - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 76.32 million for Eldorado Resorts is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Eldorado Resorts at the current share price and the inputted number of shares is $2.6 billion.

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COMPANY NEWS

▶ What Is Eldorado Resorts Incs (ERI) Share Price Doing?   [Nov-24-17 09:45AM  Simply Wall St.]
▶ Time to Take a Gamble on These 5 Gaming Stocks   [Nov-17-17 05:25PM  Zacks]
▶ Eldorado Resorts tops 3Q profit forecasts   [Nov-02-17 07:05PM  Associated Press]
▶ Why Shares of Eldorado Resorts Popped 12% in September   [Oct-04-17 12:58PM  Motley Fool]
▶ Why Eldorado Resorts Inc.'s Shares Popped 11% Today   [Aug-09-17 04:28PM  Motley Fool]
▶ Eldorado Resorts reports 2Q loss   [Aug-08-17 11:17PM  Associated Press]
▶ Eldorado Resorts posts 1Q profit   [May-04-17 05:58PM  Associated Press]
▶ Eldorado completes Isle of Capri buyout, names Alberici exec to board   [May-02-17 07:50AM  American City Business Journals]
▶ Isle of Capri sale to close Monday   [Apr-28-17 02:05PM  American City Business Journals]
▶ Eldorado Resorts posts 4Q profit   [Mar-09-17 06:20PM  Associated Press]
▶ Year In Review 2016: M&A activity alters St. Louis casino scene   [Dec-21-16 04:10PM  at bizjournals.com]
Financial statements of ERI
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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