1-Star Stocks Poised to Plunge: Caesars?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, casino operator Caesars Entertainment (Nasdaq: CZR  ) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Caesars' business and see what CAPS investors are saying about the stock right now.

Caesars facts

Headquarters (founded) Las Vegas (1937)
Market Cap $1.5 billion
Industry Casinos and gaming
Trailing-12-Month Revenue $8.9 billion
Management Chairman/CEO Gary Loveman
CFO Jonathan Halkyard
Return on Capital (average, past 3 years) 2.9%
Cash/Debt $1.1 billion / $20.3 billion
Competitors Boyd Gaming
MGM Resorts International
Wynn Resorts

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 83% of the 64 members who have rated Caesars believe the stock will underperform the S&P 500 going forward.

A few months ago, one of those Fools, All-Star BuffettJunior1, succinctly summed up the bear case for our community:

One of the worst IPOs in recent memory! A company that is consistently losing money, and with an enterprise value of $19.5 billion is ridiculous! The company's interest expense alone is [roughly twice] its current market cap. Valuing this company based on its book value is also wrong. Since most of the assets are made up of casinos (recorded at original cost) I guarantee you that they are worth a lot less than what's stated on the balance sheet.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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