Why Caesars Entertainment Is Poised to Plunge

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 and see what CAPS investors are saying about the stock right now.

Caesars facts

   

Headquarters (founded)

Las Vegas (1937)

Market Cap

$973.7 million

Industry

Casinos and gaming

Trailing-12-Month Revenue

$8.9 billion

Management

Chairman/CEO Gary Loveman
CFO Donald Colvin

Return on Capital
(average, past 3 years)

2.7%

Cash/Debt

$1.2 billion / $21.1 billion

Competitors

Boyd Gaming (NYSE: BYD  )
MGM Resorts International (NYSE: MGM  )

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

On CAPS, 74% of the 70 members who have rated Caesars believe the stock will underperform the S&P 500 going forward.

Just last month, one of those Fools, All-Star 80brown, succinctly summed up the bear case for our community:

You can only push your debt off for so many years. The move to expand internationally but only on the hospitality side proved fatal. Caesars has its own "fiscal cliff" approaching, which will likely hit by end if first quarter next year. The only drawback to making an underperform call is the likely run-up from a short squeeze that might hit early January when panicked brokers force all the shortens to cover prematurely.

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