What happened 

Shares of casino giant Caesars Entertainment (NASDAQ:CZR) jumped as much as 10.9% in trading on Friday after the company announced fourth-quarter 2020 financial results. Shares closed trading up 9.8% for the day. 

So what

Financial results were only a small part of the story today. Revenue of $1.5 billion was up 152.9% from a year ago after the Eldorado Resorts merger was completed. On a same-store basis, revenue dropped 37.5%. Net loss for the quarter was $555 million, or $2.67 per share. 

Las Vegas Strip skyline at dusk.

Image source: Getty Images.

What investors were more focused on was management's comments about a recovery in the resort and casino business. And Caesars' management was very bullish. CEO Tom Reeg said that the second half of the year may see a huge surge in demand with bookings up dramatically versus a year ago. He said that bookings for the second half of 2021 are already 32% ahead of the second half of 2019 on the same day that year. And that's even before the group's business begins to pick up. 

Now what

The casino business could become a great growth business in the second half of the year with consumers flush with cash and demand for entertainment ready to burst. That's what investors are betting on today. Time will tell if the jump in demand will justify the stock's current valuation, but for today investors aren't worried about overpaying for this casino stock.  

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.