The market anticipates that Boyd Gaming (BYD) will report a year-over-year earnings increase despite a decline in revenues when it reveals its financial results for the quarter ending September 2025. This widely held consensus outlook plays a crucial role in evaluating the company’s earnings situation; however, a significant factor that could affect its short-term stock performance will be the actual results compared to these expectations. If the reported figures exceed predictions in the upcoming earnings report, anticipated for release on October 23, the stock may experience a rise. Conversely, a failure to meet these estimates could lead to a decline in stock value.
While the durability of any immediate price fluctuation and future earnings forecasts will significantly rely on the management’s commentary regarding business conditions during the earnings call, it is also essential to assess the likelihood of a positive earnings per share (EPS) surprise. For the forthcoming report, the casino operator is expected to announce quarterly earnings of $1.54 per share, reflecting a modest year-over-year increase of 1.3%. Expected revenues are projected at $864.1 million, indicating a decrease of 10.1% compared to the same quarter last year. Over the past 30 days, the consensus EPS estimate has been adjusted upward by 1.32%, illustrating how analysts have collectively revised their initial projections during this timeframe.
Understanding Estimate Revisions
Estimate revisions made prior to a company’s earnings announcement provide insights into the business environment for the reporting period. Central to this analysis is the Zacks Earnings ESP (Expected Surprise Prediction) model, which compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate is a more recent and refined version of the consensus EPS estimate. The premise is that analysts adjusting their estimates just before an earnings release possess the most current information, which may be more reliable than earlier predictions. Consequently, a positive or negative Earnings ESP reading can indicate the potential divergence of actual earnings from the consensus estimate. However, the model’s effectiveness is notably strong for positive ESP readings only.
A positive Earnings ESP is a robust indicator of a potential earnings beat, especially when aligned with a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold). Research indicates that stocks falling into this category achieve a positive surprise nearly 70% of the time, with a solid Zacks Rank enhancing the predictive strength of the Earnings ESP. It is important to recognize that a negative Earnings ESP reading does not necessarily indicate an impending earnings miss, as our findings show that predicting an earnings beat with confidence is challenging for stocks with negative Earnings ESP readings or Zacks Ranks of #4 (Sell) or #5 (Strong Sell).
In the case of Boyd, the Most Accurate Estimate exceeds the Zacks Consensus Estimate, indicating a recent bullish sentiment among analysts regarding the company’s earnings outlook, resulting in an Earnings ESP of +4.25%. Furthermore, the stock currently holds a Zacks Rank of #2, suggesting a high probability that Boyd will surpass the consensus EPS estimate.
Examining Historical Earnings Performance
When analysts calculate future earnings estimates, they often consider the company’s track record in meeting past consensus estimates. Therefore, reviewing the company’s surprise history can provide valuable insight for anticipating its upcoming performance. In the last reported quarter, Boyd was expected to achieve earnings of $1.67 per share but instead delivered $1.87, resulting in a surprise of +11.98%. Over the preceding four quarters, the company has consistently outperformed consensus EPS estimates.
It’s crucial to note that an earnings beat or miss is not the sole factor influencing stock price movements. Several stocks may experience declines even after reporting earnings beats due to other disappointing elements that may affect investor sentiment. Conversely, unforeseen positive catalysts can prop up stocks despite earnings misses. Thus, investing in stocks projected to beat earnings expectations can enhance the likelihood of success. This reinforces the importance of checking a company’s Earnings ESP and Zacks Rank before quarterly reports.
Boyd appears to be a strong candidate for an earnings beat. However, investors should also consider additional factors before deciding to invest in or avoid this stock prior to the earnings announcement.
Another Potential Earnings Surprise in the Gaming Sector
Another notable stock in the gaming industry, Las Vegas Sands (LVS), is expected to report earnings of $0.61 per share for the quarter ending September 2025, which signifies a year-over-year growth of 38.6%. Projected revenues for the quarter stand at $3 billion, reflecting a 12% increase compared to the previous year. Over the last month, the consensus EPS estimate for Las Vegas Sands has been revised downward by 2.2%. Nonetheless, the company currently boasts an Earnings ESP of +15.02%, indicating a higher Most Accurate Estimate. When this positive Earnings ESP is coupled with a Zacks Rank of #1 (Strong Buy), it suggests that Las Vegas Sands is likely to exceed the consensus EPS estimate. Notably, the company has surpassed EPS estimates only once in the last four quarters.
Stay informed on upcoming earnings releases with the Zacks Earnings Calendar. For the latest recommendations from Zacks Investment Research, you can download a report featuring the 7 Best Stocks for the Next 30 Days.
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