Everi Exudes Share Price Excellence on WinStar CashClub Deal, Analyst Lifts Target

Posted on: December 3, 2020, 09:19h. 

Last updated on: December 3, 2020, 10:28h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Shares of Everi Holdings (NYSE:EVRI) are soaring Thursday. That’s after the company said it will provide its CashClub Wallet cashless gaming solution to WinStar World Casino and Resort in Oklahoma, one of the world’s largest gaming properties.

Everi WinStar
The WinStar Casino in Oklahoma, seen here. The tribal giant is a new client of Everi Holdings. (Image: NBC 5)

News of the accord with WinStar is propelling Everi shares to a gain of more than 14 percent in midday trading. That’s extending a run that’s seen the name surge more than 26 percent over the past month while pushing the stock to its highest levels since March.

Las Vegas-based Everi makes gaming machines. But analysts and investors are growing enthusiastic about the company because of its fast-growing fintech unit, which includes the CashClub Wallet product. That solution provides a way for gamblers and operators to reduce the need for cash inside gaming venues, an idea that’s gaining momentum against the backdrop of the coronavirus pandemic.

In the deal with the Oklahoma casino, CashClub will take the name of that property, which is owned by Chickasaw Nation, one of the largest operators of tribal gaming venues.

“The WinStar Wallet is a mobile solution that allows for the cashless and touchless funding of electronic gameplay throughout the casino floor,” according to a statement.

Located just north of the Texas-Oklahoma border, WinStar has 8,500 gaming machines, 100 table games, and 57 poker tables. Guests can use WinStar Wallet for all of the property’s amenities, including dining, entertainment, golf, and the spa.

More Analyst Enthusiasm

The financial terms of the deal with WinStar weren’t disclosed. But Roth Capital analyst David Bain previously said two agreements with tribal operators notched by Everi account for 15 percent of the company’s fintech business and were going overlooked by investors.

In a note to clients today, Bain, long one of the most bullish Everi analysts, lifts his price target on the stock to $21 from $20. That implies upside of 61.5 percent from where the shares reside at this writing. His $21 forecast is well above the Wall Street consensus of $14.43.

“We believe WinStar and EVRI are coordinating an end-patron ramp plan, and multiple other transaction drivers will be offered relative to the near-term, including new loyalty functionality, and ultimately, outside casino fund accessibility,” said the analyst.

The Chickasaw Nation operates approximately 20 gaming venues in Oklahoma, according to the tribe’s website, indicating Everi could have a potentially lucrative client on its hands. The Sooner State is a compelling market for the fintech company because neighboring Texas, the second-largest state in the US, don’t have casinos.

More Catalysts Coming

Today’s surge by Everi stock may not be a one-off event. Bain, the Roth Capital analyst, says another customer will roll out CashClub Wallet in the coming weeks.

He didn’t identify that operator, but he did say it’s one of the largest casino firms in the world.

The analyst adds that on a standalone basis, Everi’s fintech basis is worth $16 a share. When accounting for peer average multiples on gaming device suppliers, the stock could trade near $29, or more than double where it resides today.