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Caesars Entertainment (CZR)
NASDAQ:CZR
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Caesars Entertainment
(NASDAQ:CZR)
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Rating:50Neutral
Price Target:
$26.00
▼(-1.52% Downside)
Action:ReiteratedDate:02/19/26
The score is held back primarily by elevated financial risk from heavy leverage and uneven bottom-line profitability, alongside weak technical momentum. These are partially offset by a constructive earnings call emphasizing strong digital performance and improving free-cash-flow outlook; valuation is also constrained by a negative P/E and no dividend support.
Positive Factors
Digital growth and margin expansion
Caesars Digital has achieved durable, high-growth scale with strong margin conversion, driven by rising active payers, iCasino growth and product improvements. A sustained ~20% top-line CAGR with ~50% EBITDA flow‑through creates recurring cash generation and differentiation vs. legacy peers, supporting reinvestment and digital margin resilience over the next several quarters.
Improving free cash flow and OCF
A material FCF rebound and steady operating cash flows provide structural capacity to pay down debt, fund targeted capex, and support opportunistic buybacks. Over 2–6 months this improves financial flexibility, reduces refinancing pressure, and enables management to execute deleveraging without depending solely on volatile operating upsides.
Diversified resort portfolio & loyalty ecosystem
Scale across Las Vegas, regionals, events and conventions plus Caesars Rewards creates cross-sell and revenue diversification that cushions localized downturns. The omnichannel loyalty wallet and venue mix (rooms, F&B, gaming, events) support stable spend per customer and long-term guest retention, lowering revenue cyclicality over multiple quarters.
Negative Factors
Very high leverage
The capital structure's heavy leverage materially limits flexibility: large interest and principal obligations heighten refinancing and covenant risk and constrain strategic investments. Even with improving FCF, elevated net debt amplifies downturn exposure and reduces tolerance for operating volatility over the medium term.
Inconsistent net profitability
While core operating margins have been reasonable historically, recent net losses erode equity and limit retained earnings available for deleveraging or reinvestment. Inconsistent bottom-line performance raises uncertainty about sustainable earnings power and impairs confidence in long-term shareholder value creation.
Cyclicality and Las Vegas demand softness
Heavy exposure to leisure travel, events and shoulder-period demand makes revenues and margins sensitive to macro and timing factors. Weakness in occupancy and ADR directly compresses high-margin gaming and rooms revenue, creating persistent volatility that can impede steady deleveraging and free-cash-flow improvement.
Caesars Entertainment (CZR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.37B
Dividend YieldN/A
Average Volume (3M)7.18M
Price to Earnings (P/E)―
Beta (1Y)1.55
Revenue Growth0.87%
EPS Growth31.28%
CountryUS
Employees50,000
SectorConsumer Cyclical
Sector Strength84
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)-1.23
Shares Outstanding203,521,030
10 Day Avg. Volume7,579,236
30 Day Avg. Volume7,181,004
Financial Highlights & Ratios
PEG Ratio-0.11
Price to Book (P/B)1.39
Price to Sales (P/S)0.42
P/FCF Ratio9.36
Enterprise Value/Market Cap5.72
Enterprise Value/Revenue2.67
Enterprise Value/Gross Profit6.09
Enterprise Value/Ebitda8.81
Forecast
1Y Price Target
$30.36Price Target Upside15.00% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
EPS Forecast (FY)-0.09
Revenue Forecast (FY)$11.76B
Caesars Entertainment Business Overview & Revenue Model
Company DescriptionCaesars Entertainment, Inc. operates as a gaming and hospitality company in the United States. The company operates casinos comprising poker, keno, and race and online sportsbooks; dining venues, bars, nightclubs, and lounges; hotels; and entertainment venues. It also provides staffing and management services; accessories, souvenirs, and decorative items through retail stores; and online sports betting and iGaming services. As of December 31,2021, the company owned, leased, and managed 52 domestic properties in 16 states, consisting of approximately 55,700 slot machines, video lottery terminals, and e-tables; 2,900 table games; and 47,700 hotel rooms. Caesars Entertainment, Inc. was founded in 1937 and is based in Reno, Nevada.
How the Company Makes MoneyCaesars Entertainment generates revenue through multiple streams, primarily from its gaming operations, including slot machines, table games, and sports betting. A significant portion of its income comes from hotel accommodations and food and beverage sales at its properties. Additionally, Caesars has expanded its revenue model by venturing into online gaming and sports betting, capitalizing on the growing demand for digital gaming experiences. The company also benefits from loyalty programs, such as the Caesars Rewards program, which fosters customer retention and repeat business. Strategic partnerships with tech and gaming companies enhance its digital offerings, while various promotional events and entertainment options drive customer traffic to its locations, contributing to overall revenue growth.
Caesars Entertainment Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
Overall the call was constructive — Caesars reported modest enterprise revenue growth and consolidated Q4 revenue and EBITDAR increases, highlighted by standout performance from Caesars Digital (strong top-line and EBITDA growth, record quarterly digital EBITDA, and meaningful user growth). Management emphasized ongoing asset reinvestment in Las Vegas, strategic initiatives in Regionals, balance sheet progress and strong free cash flow outlook. Headwinds were acknowledged: leisure demand softness in Vegas (lower occupancy and ADR leading to a ~6% Las Vegas EBITDAR decline), weather-related Regional EBITDA impacts (~$10M), and some digital hold volatility. However, the scale and pace of digital growth, recurring revenue initiatives (Caesars Rewards), ongoing capital deployment plans, debt reduction and expected margin tailwinds from marketing roll-offs outweigh the near-term operational headwinds.Q4-2025 Updates
Positive Updates
Full-Year Same-Store Revenue Growth
Full year same-store enterprise net revenues increased $266 million, or 2% year-over-year, driven by portfolio diversity, omnichannel focus and guest experience enhancements.
Quarterly Revenue and EBITDAR Improvement
Fourth quarter consolidated net revenues were $2.9 billion, up 4% year-over-year, with adjusted EBITDAR of $901 million, up 2% year-over-year.
Digital Segment — Strong Growth and Record Performance
Caesars Digital set an all-time quarterly EBITDA record of $85 million in Q4 despite poor hold in October; Q4 net revenue was $419 million. Full year digital net revenue was $1.4 billion, up 21% YoY, and full year adjusted EBITDA was $236 million, up 100% YoY. Management reiterated a targetable long-term profile of ~20% top-line growth with ~50% flow-through to EBITDA.
Digital User and Product Momentum
Total monthly unique payers rose 19% in Q4 to 585,000. Mobile sports handle grew 4% and total parlay mix improved ~210 basis points YoY. iCasino net revenue grew 28% in Q4 driven by volume and higher monthly active users. Universal digital wallet and player account system now live in 26 jurisdictions, with full rollout expected soon.
Las Vegas Event and Slot Strength
Las Vegas benefited from a strong event calendar including a record F1 event and New Year's Eve, a 17% group & convention room night mix, and investment-led improvements (new presidential villas, Sky Villas, remodeled Palace Court) that helped set an all-time record for slot volume in 2025.
Regional Revenue Growth and Strategic Investments
Regional revenues rose 4% year-over-year, with strong returns noted in Danville and New Orleans. Strategic reinvestments in Caesars Rewards and marketing showed promising rated-play trends; near-term catalysts include Windsor's transition to owned (March), completion of a $200 million Tahoe renovation (summer), and the April 9 opening of Harrah's Oklahoma.
Balance Sheet and Cash Generation
The company continued to reduce debt in 2025 while executing opportunistic share repurchases. Management expects decreasing CapEx, lower interest expense, cash taxes well below $100 million, and strong free cash flow in 2026 to be used for a mix of debt paydown and buybacks.
Marketing and Cost Tailwinds for Digital
Significant fixed marketing contracts roll off (~$35M in 2026 H2 and ~$20M+ in 2027), the majority of which should flow to EBITDA; some proceeds will be reinvested into high-return marketing — a potential material booster to digital margins.
Technology and Product Enhancements
Ongoing product upgrades (in-house games, improved bonusing, elevated live dealer, shared wallet launches such as Missouri) and continued tech conversions underpin customer engagement and retention improvements.
Negative Updates
Las Vegas Occupancy and ADR Pressure
Las Vegas same-store adjusted EBITDAR declined to $447 million from $477 million last year (approx. 6% decline). Occupancy was reported at ~92% versus 96.5% a year ago, and ADR declined ~5%, reflecting continued softness in the leisure traveler and pressure in shoulder periods.
Regional EBITDAR Impacted by Weather
Regional adjusted EBITDAR was $407 million, slightly down year-over-year and negatively affected by poor winter weather in December. Management estimated weather likely cost the company a little over $10 million of EBITDA in late-year weeks; absent the weather impact, Regional EBITDAR would have grown YoY.
Leisure Demand Softness and Operational Volatility
Leisure traveler demand remained soft (notably in shoulder periods), creating operational challenges for staffing and scheduling as properties cycle between softer weekdays and peak event weekends; recovery timing remains dependent on broader leisure trends.
Digital Hold Volatility
Digital experienced poor hold in October, which negatively impacted results in that month (though hold-normalized adjusted EBITDA remained strong at $90 million in Q4). Hold volatility remains a risk to short-term digital profitability.
Comparability and One-Time Prior-Year Benefits
First quarter comparables are impacted by one-time items (e.g., Super Bowl benefit in New Orleans in the prior year worth just over $10 million of incremental EBITDA), which could make near-term YoY comparisons more challenging.
Regulatory/Strategic Risks — Prediction Markets & M&A Timing
Management stated it will not participate in prediction markets under current regulatory uncertainty due to license risk. Additionally, valuation weakness in the market makes a near-term separation/spin of the digital business unlikely despite long-term optionality.
Company Guidance
Caesars guided to continued digital-led growth and improving travel trends for 2026: Digital is expected to sustain roughly 20% top-line growth with ~50% flow‑through to EBITDA (Q4 digital net revenue $419M, adjusted EBITDA $85M, hold‑normalized EBITDA $90M, Q4 flow‑through 56%; FY digital net revenue $1.4B, +21% YoY, FY digital EBITDA $236M, +100% YoY), mobile sports handle +4% and parlay mix +210 bps, total monthly unique payers +19% to 585,000 and iCasino net revenue +28%; enterprise results showed FY same‑store net revenues up $266M (+2%), Q4 consolidated net revenues $2.9B (+4%) and adjusted EBITDAR $901M (+2%); Las Vegas Q4 same‑store adj. EBITDAR $447M (vs $477M prior), occupancy 92% (96.5% prior) and ADR down 5% (Las Vegas EBITDA down 6% Q/Q), Regionals Q4 revenues +4% with adj. EBITDAR $407M but a roughly $10M weather headwind, and Caesars expects sequential improvement in Vegas and Regional strength later in the year (Windsor transition to owned in March, Tahoe $200M renovation complete this summer, Harrah’s Oklahoma opening April 9); balance‑sheet tailwinds include decreasing CapEx and interest expense, cash taxes well below $100M, a nearest bank facility maturity in ~24 months, and plans to deploy 2026 free cash flow to debt paydown and opportunistic buybacks, while tech rollouts (universal digital wallet live in 26 jurisdictions, to be live in all by quarter end) and marketing roll‑offs ($~35M in ’26, $20M+ in ’27) should flow predominantly to EBITDA.Caesars Entertainment Financial Statement Overview
Summary
Stable revenue and improved 2025 free cash flow support results, but the balance sheet is a major risk (very high leverage and declining equity) and net profitability has been inconsistent with losses in 2024–2025.Income Statement
Revenue has largely stabilized in the $11–$11.5B range since 2021, with modest growth in 2025 after a slight decline in 2024. Core operating profitability appears solid in most years (EBIT margin ~16–20% from 2022–2024), but bottom-line performance is inconsistent: net losses in 2024 and 2025 following profitability in 2023. Margin signals are mixed as well, with 2025 showing negative EBITDA and zero/blank gross profit metrics, which reduces confidence and points to volatility or data-quality risk in reported profitability.55
Neutral
Balance Sheet
Leverage is the key overhang: total debt remains very high (~$24.9–$26.9B) versus a relatively small equity base (~$3.7–$5.0B), keeping debt-to-equity elevated (~5.4x–6.8x). Equity has drifted down from 2023 to 2025, and returns on equity turned negative in 2024–2025 after a positive 2023, reflecting pressure on shareholder value creation. While total assets are sizable and fairly stable, the capital structure leaves limited balance-sheet flexibility if operating results soften.34
Negative
Cash Flow
Cash generation is a relative strength: operating cash flow is consistently positive from 2021–2025 (notably improving in 2025), and free cash flow rebounded strongly to +$497M in 2025 after turning negative in 2024. Cash flow quality is mixed, however—operating cash flow covers only about half to two-thirds of net income in recent years (and net income is negative in 2024–2025), and free cash flow has been volatile across the period. Overall, the company is producing cash, but consistency and coverage remain watch items given the leverage profile.62
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 11.49B | 11.24B | 11.53B | 10.82B | 9.57B |
| Gross Profit | 4.33B | 5.83B | 6.13B | 5.42B | 4.92B |
| EBITDA | 3.50B | 3.58B | 3.56B | 2.92B | 2.17B |
| Net Income | -502.00M | -278.00M | 786.00M | -899.00M | -1.02B |
Balance Sheet | |||||
| Total Assets | 31.64B | 32.59B | 33.37B | 33.53B | 38.03B |
| Cash, Cash Equivalents and Short-Term Investments | 887.00M | 866.00M | 1.00B | 1.04B | 1.07B |
| Total Debt | 26.34B | 25.06B | 25.07B | 25.43B | 26.27B |
| Total Liabilities | 27.95B | 28.21B | 28.65B | 29.78B | 33.49B |
| Stockholders Equity | 3.50B | 4.16B | 4.55B | 3.71B | 4.48B |
Cash Flow | |||||
| Free Cash Flow | 520.00M | -182.00M | 545.00M | 23.00M | 652.00M |
| Operating Cash Flow | 1.32B | 1.11B | 1.81B | 975.00M | 1.17B |
| Investing Cash Flow | -594.00M | -743.00M | -1.14B | -382.00M | -2.92B |
| Financing Cash Flow | -763.00M | -498.00M | -829.00M | -1.28B | -550.00M |
Caesars Entertainment Technical Analysis
Positive
26.40
Price Trends
22.76
Positive
22.33
Positive
24.67
Positive
Market Momentum
1.11
Negative
67.61
Neutral
95.92
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CZR, the sentiment is Positive. The current price of 26.4 is above the 20-day moving average (MA) of 22.09, above the 50-day MA of 22.76, and above the 200-day MA of 24.67, indicating a bullish trend. The MACD of 1.11 indicates Negative momentum. The RSI at 67.61 is Neutral, neither overbought nor oversold. The STOCH value of 95.92 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CZR.
Caesars Entertainment Risk Analysis
Caesars Entertainment disclosed 31 risk factors in its most recent earnings report. Caesars Entertainment reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Caesars Entertainment Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $6.05B | 3.78 | 87.98% | 0.84% | 5.91% | 336.91% | |
70 Outperform | $6.06B | 19.42 | 85.64% | 3.22% | 4.69% | 15.18% | |
62 Neutral | $9.10B | 46.86 | 7.55% | ― | 0.05% | -94.07% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
57 Neutral | $36.01B | 27.64 | 82.89% | 1.51% | 8.37% | 10.20% | |
56 Neutral | $10.60B | 38.12 | -90.44% | 0.80% | -0.26% | -44.45% | |
50 Neutral | $5.37B | -9.69 | -13.18% | ― | 0.87% | 31.28% |
* Consumer Cyclical Sector Average
CZR
Caesars Entertainment
26.40
-0.86
-3.15%
BYD
Boyd Gaming
80.13
14.41
21.92%
LVS
Las Vegas Sands
53.60
9.19
20.68%
MGM
MGM Resorts
35.57
3.68
11.54%
WYNN
Wynn Resorts
101.61
13.99
15.97%
RRR
Red Rock Resorts
57.70
15.63
37.16%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.