Boyd Gaming (BYD 1.26%) stock suffered big sell-offs Wednesday. The gambling specialist's share price ended the daily trading session down 11%, according to data from S&P Global Market Intelligence.

Boyd Gaming published third-quarter earnings results after the market closed on Tuesday, posting earnings for the period that fell short of the market's targets. While the company's revenue of $903.15 million beat the average Wall Street estimate by roughly $22.5 million, its non-GAAP (adjusted) earnings per share of $1.36 missed the average target by $0.11 per share. 

Why did investors react so negatively to Boyd's Q3 results?

Boyd Gaming's revenue grew roughly 3% year over year in the third quarter and topped Wall Street's expectations. On the other hand, the business saw costs rise at a greater-than-expected rate. Total operating expenses rose roughly 7.1% year over year to reach $685.29 million. With operating expenses rising significantly faster than revenue, it's not surprising that investors had a negative reaction to the company's recent earnings report. 

What comes next for Boyd Gaming stock?

Boyd Gaming ended the third quarter with cash totaling $269.2 million and total debt of $2.9 billion. While the company has a relatively high debt load, it has also continued to serve up consistent profits. The gambling specialist's financial foundations look solid, but there's a risk that profitability will erode going forward. 

If growth for operating expenses continues to outstrip revenue gains, it's reasonable to expect that the company's stock will continue to see bearish momentum. On the other hand, it's possible that the recent increase in operating costs stems from one-time and otherwise short-term expenditures. It's also possible that rising operating expenses in Q3 signal the start of a more sustained trend. 

BYD PE Ratio (Forward) Chart

BYD PE Ratio (Forward) data by YCharts

Trading at roughly 8.5 times this year's expected earnings and 1.4 times expected sales, Boyd Gaming looks reasonably valued at current prices. But investors should keep in mind that there's some uncertainty when it comes to forward-looking revenue growth and operating costs.