Boyd Gaming: Strip Noise vs. Underlying Value

Boyd Gaming's recent 5% stake sale could be a great deal for long-time holders, opening up new opportunities. Despite noise on the Las Vegas Strip, the company's fundamentals remain strong, with a solid balance sheet, growing revenue, and a commitment to innovation. Long-term investors should consider taking advantage of this opportunity to increase their exposure to Boyd Gaming.

Boyd Gaming's recent sale of a 5% stake in FanDuel to Flutter Entertainment for $1.76 billion has significant implications for both companies and long-term investors. This transaction not only reshapes FanDuel's ownership structure but also positions Boyd Gaming for further growth in the highly competitive gambling market.

The deal, completed on July 31, 2025, saw Flutter Entertainment acquire the remaining 5% stake, bringing its total ownership to 100%. This move is expected to accelerate FanDuel's growth in the U.S. market, as CEO Peter Jackson expressed confidence in the transformative potential of full control [1]. Boyd Gaming, however, remains optimistic about the outcome, with CEO Keith Smith highlighting the strong return on their investment and the potential for new growth opportunities [1].

For Boyd Gaming, the sale of its stake in FanDuel is part of a broader strategy to reduce debt and fund growth in the iGaming sector. The company reported $1.03 billion in revenue for Q2 2025, a 6.9% year-over-year increase, and $1.87 in earnings per share [2]. The strategic sale of the FanDuel stake provided $1.758 billion in proceeds, which Boyd Gaming plans to use to reduce debt and invest in high-growth segments [2].

Despite the insider sales of $11 million in shares by Boyd Gaming executives, the company's strong financials and strategic reinvestment suggest that these transactions were liquidity-driven rather than a bearish signal [2]. The company's gross margin of 50.97% and quarterly dividend of $0.18 highlight its operational efficiency and commitment to shareholder returns [2].

Institutional ownership accounts for 76.81% of Boyd Gaming's shares, with major buyers like Norges Bank and Boston Partners increasing their stakes, signaling confidence in the company's strategic direction [2]. Conversely, sellers such as Vanguard Group and Balyasny Asset Management have reduced positions, potentially reflecting portfolio rebalancing or caution [2].

Analysts have maintained a "Hold" consensus for Boyd Gaming, with recent upgrades from Macquarie, Mizuho, and Truist Financial raising price targets to $88, $89, and $100, respectively [2]. This mix of bullish and bearish sentiment creates a fertile ground for contrarian investors who can assess the company's fundamentals independently of market noise.

In conclusion, Boyd Gaming's recent stake sale in FanDuel presents a compelling opportunity for long-term investors. Despite the noise on the Las Vegas Strip, the company's fundamentals remain strong, with a solid balance sheet, growing revenue, and a commitment to innovation. Long-term investors should consider taking advantage of this opportunity to increase their exposure to Boyd Gaming.

References:

[1] https://www.tekedia.com/analysis-boyd-gaming-sells-fanduel-stake-to-flutter-for-1-76-billion/?srsltid=AfmBOoq3LfJn8Lsy46ns9rig8lSv5jRA1TCb65ev6R3Dt0l1XnmjJNdT

[2] https://www.ainvest.com/news/boyd-gaming-contrarian-opportunity-insider-sales-analyst-optimism-2508/