The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Pinnacle Entertainment met expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded slightly, and GAAP earnings per share grew.
Margins expanded across the board.
Pinnacle Entertainment logged revenue of $275.8 million. The 16 analysts polled by S&P Capital IQ wanted to see a top line of $278.7 million on the same basis. GAAP reported sales were 3.8% higher than the prior-year quarter's $265.7 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.26. The 18 earnings estimates compiled by S&P Capital IQ forecast $0.10 per share on the same basis. GAAP EPS were $0.40 for Q4 against -$0.16 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 75.7%, 120 basis points better than the prior-year quarter. Operating margin was 12.1%, 460 basis points better than the prior-year quarter. Net margin was 9.1%, 1,290 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $285 million. On the bottom line, the average EPS estimate is $0.18.
Next year's average estimate for revenue is $1.21 billion. The average EPS estimate is $0.75.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 120 members rating the stock outperform and 57 members rating it underperform. Among 52 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 37 give Pinnacle Entertainment a green thumbs-up, and 15 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Pinnacle Entertainment is outperform, with an average price target of $15.88.
Over the decades, small-cap stocks like Pinnacle Entertainment have provided market-beating returns, provided they're value-priced and have solid businesses. Read about a pair of companies with a lock on their markets in "Too Small to Fail: Two Small Caps the Government Won't Let Go Broke." Click here for instant access to this free report.
- Add Pinnacle Entertainment to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. 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 Motley Fool has a disclosure policy.