BOYD GAMING CORP (BYD): what the price requires

At today's price, BOYD GAMING CORP (BYD) is priced for +13.0% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-19 · Source: https://boothcheck.com/report/BYD

Headline

FieldValue
TickerBYD
CompanyBOYD GAMING CORP
Current price$85.78/sh
CompositionGaming 64% / Food & beverage 8% / Room 5% / Online 3% / Online reimbursements 14% / Management fee 2% / Other 4%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed6.7%
Operating margin today18.5%
Margin compression implied-11.8pp
Implied growth13.0%
Multiple paid26x operating income

The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 7.8% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~8.2pp.

Reconcile: at the x-ray's 9.3% required return this reads ~24.7%/yr; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history+0.32σ
cohort percentile (of 212 peers)73
sustained it ~5 years at this level48%
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset8.61x4expensive
Earnings8.36x4expensive
Relative1.06x5expensive
Growth0.86x3justifies

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.6%); the inversion above states its own rate.

Per-Model Detail (n=16)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$101.850.84xyesFCF base $0.3B, growth 3% (input: historical growth), terminal g 3.5%, WACC 6.6%, 5yr projection
DCF Exit MultipleGrowth$100.190.86xyesExit EV/EBITDA: 6.8x / 8.8x / 10.8x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative$80.671.06xyesP/E 39.6x (blended: static sector reference 18x + trailing (TTM) 110x), scenarios: 33.4x / 39.6x / 45.8x (bear / base = reference held flat / bull), EV/EBITDA 12x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$8.4010.21xyesBV/sh $33.06, ROE (TTM) 2.4%, ke 9.3%
Two-Stage Excess ReturnAsset$4.8117.83xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$77.261.11xyesRev $4.1B, growth 3% (input: historical growth; tapered), Terminal P/S: 1.4x / 1.6x / 1.9x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$7.6111.27xyesEPS $0.63, growth 2% (input: historical EPS growth), PEG=55.19 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$133.860.64xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.95B × (1−24%) / WACC 6.6% → EPV (no growth)
Residual IncomeAsset$3.5224.37xyesBV $33.06 + 5yr PV of (ROE (TTM) 2.4% − Kₑ 9.3%) × BV; BV grows 1.5%/yr (excluded from median)
Graham NumberAsset$21.723.95xyes√(22.5 × EPS $0.63 × BVPS $33.06) — Graham's conservative floor
EV/EBITDA RelativeRelative$129.660.66xyesEBITDA $1.04B × sector EV/EBITDA 12.0x
FCF YieldEarnings$6.3913.42xyesFCF $281.1M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$1.8546.36xyesSBC-adj FCF $0.25B (FCF $0.28B − SBC $0.03B) capitalized at Kₑ (excluded from median)
Ben Graham FormulaEarnings$20.454.19xyesEPS $0.63 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$12.237.01xyesBV $33.06 × (ROIC 2.5% / WACC 6.6%)
P/Sales SectorRelative$133.430.64xyesRevenue $4.10B × sector P/S 2.5x
PEG Fair ValueRelative$23.773.61xyesEPS $0.63 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$6.8512.52xyesEPS $0.63 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$3.2b
Net debt / NOPAT (after-tax)5.63x
Net debt / operating income (pre-tax)4.28x
Interest coverage4.6x
Share count CAGR (buyback)-5.1%
Burning cashno

Bullet Takeaways

Bull Case

Boyd is a mature regional casino operator that has stopped behaving like one. The conventional read of a casino company is a leveraged bet on discretionary consumer spending and the local economy around each property. Boyd still is that, but the way it now makes and returns money looks more like a cash machine than a growth story, and that distinction is the bull case. The company describes its own approach plainly in its annual filing: "Our operating strategy is focused on building loyalty with core customers and operating" its properties around repeat local play rather than chasing destination tourists. In the Midwest and South, that strategy delivered roughly 4% revenue growth and 5% segment earnings growth in the first quarter of 2026, with property margins above 39%. A regional casino base that defends 39% margins while growing low-single digits is a durable annuity, not a turnaround.

The second leg is what management does with the cash that annuity throws off. Boyd sold its 5% stake in FanDuel to Flutter Entertainment for about $1.755 billion, closing the deal in mid-2025. That payment converted a minority financial holding into balance-sheet firepower, and management pointed it straight at the share count. The board authorized an additional $500 million of buyback capacity in July 2025, and the company has retired roughly a third of its shares since 2021. The trailing share count has shrunk at about a 9% annual pace. When a business earning steady operating income retires that many shares, each remaining share owns a larger slice of the same cash flow, and the per-share math improves even if the casinos do nothing heroic.

The digital relationship is the part of Boyd most easily missed. Selling the FanDuel equity did not sever the operating tie. The company still earns a revenue share from online operators that ride its market access: per the 10-K, "Under our online collaborative arrangements with FanDuel and other third -party operators, we receive a revenue share from FanDuel or the other third -party operators based on" the betting volume routed through Boyd's licenses. Management guided the online segment to $30 million to $35 million of segment earnings and the managed-and-other segment to $110 million to $114 million for the year. That is capital-light income layered on top of the physical casinos, and it is the piece of Boyd that grows without needing another building.

Bear Case

The variable with the most leverage over Boyd's thesis is the one the company cannot control: the health of the regional consumer and the supply of gaming nearby. Boyd's filing is direct that competition is structural and intensifying, naming rivals that range from rebuilt resorts to "online gaming websites, and could compete with any new forms of gaming that may be" legalized in its markets, and warning that expansion of Native American gaming "in areas located near our properties" could draw away the local customers its model depends on. A regional casino's moat is geographic, and geographic moats erode the moment a competitor opens down the highway or a state expands its license count. The current price does not obviously discount that erosion; it extrapolates the recent margin strength forward.

The price requires the business to keep compounding faster than a mature casino operator usually can. At today's level the market is paying roughly 26 times company-wide operating income, which embeds operating-profit growth of about 13% a year sustained for five years. Boyd has delivered growth near that pace recently, so the rate is not fantastical; the stretch is in the duration. Historically only about half of companies that grow that fast hold the pace for a full five years, and a regional gaming base with low-single-digit organic revenue growth is not the profile that usually does. If that growth assumption mean-reverts toward what the physical casinos actually produce, the multiple compresses, because the peer-multiple and earnings-power lenses already read the price as full.

The balance sheet is the third pressure point, and it interacts with the first two. Net debt of about $3.2 billion sits against roughly $712 million of trailing operating income, a leverage ratio near four-and-a-half times, with interest covered about five times over. That is manageable while the casinos are full and Las Vegas recovers. It is less comfortable if regional play softens at the same time the company is spending $650 million to $700 million on capital projects and $170 million a quarter returning cash to holders. Fixed costs and fixed debt service do not flex with revenue, so the same operating leverage that lifts margins on the way up amplifies the damage on the way down. The reported net margin of about 1.5% looks alarming on its face, but that reflects the absence of the prior year's one-time FanDuel gain rather than an operating collapse; the real bear point is not the optics, it is that the debt is real whether or not the gain repeats.

Valuation

Start with what the price is paying for. At about $85 (June 27, 2026) a share, Boyd is valued near 26 times company-wide operating income, and inverting that price says the market expects operating profit to grow on the order of 13% a year for five years. That is a demanding but not impossible bet for this company: the recent quarters have produced growth in that neighborhood, so the question the price asks is less "can Boyd grow that fast once" and more "can a mature regional operator hold that pace for half a decade."

The methods used to triangulate the price split cleanly, and the split is the information. The peer-multiple lens lands almost exactly at today's price, and the forward cash-flow methods reach it; the asset-value and earnings-power lenses sit well below it. In plain terms, you can defend Boyd's price if you credit its growth and pay the multiple its gaming peers command, but you cannot defend it on book value or on the earnings it currently banks. The cash-flow methods get to the price partly by holding today's enterprise multiple flat for the life of the forecast, near 12 times EBITDA, which is the same growth bet stated a different way. The earnings-power read sits below price largely because trailing reported earnings are depressed by the comparison against last year's FanDuel gain, so that lens understates the recurring cash generation; the operating-income basis is the cleaner anchor here.

Solvency is where the bet meets its constraint. Net debt of roughly $3.2 billion against operating income near $712 million is about four-and-a-half times leverage, with interest coverage around five times. The shareholder-return program is aggressive: management returned close to $170 million in the first quarter alone through buybacks and a small dividend, against full-year capital spending guided at $650 million to $700 million. The reported FY2024 segment earnings of about $1.39 billion in Adjusted EBITDAR give a sense of the cash the property base produces before corporate and financing costs. The buyback is doing real work on the per-share figures, but it is being funded by a balance sheet that already carries meaningful debt, which is the tension a buyer at this price is underwriting.

Catalysts

The most immediate driver is Las Vegas. First-quarter 2026 results were held back by construction disruption and softer destination spending in the Las Vegas market, even as the Midwest and South segment grew revenue about 4% and segment earnings about 5%. Total revenue reached roughly $997 million, up slightly year over year, with property margins above 39%. The pace and timing of the Las Vegas recovery is the swing factor for the back half of the year, and it is the cleanest item for an investor to track print by print.

Capital return remains the structural catalyst. Following the $1.755 billion FanDuel stake sale to Flutter and the additional $500 million buyback authorization in July 2025, the company has continued to retire stock at scale, repurchasing about $155 million of shares in the first quarter of 2026. With management guiding the online segment to $30 million to $35 million and the managed-and-other segment to $110 million to $114 million of segment earnings for the year, the capital-light digital income provides a steadier counterweight to the cyclical casino base.

Analyst sentiment is split, which fits a stock whose bull and bear cases share the same facts. Jefferies issued a Buy rating after meeting with management, while J.P. Morgan has held a Neutral stance, and published price targets have clustered in the high-$80s to roughly $100 range. The divergence tracks the central question: whether the iGaming and buyback story outweighs the regional-competition and leverage risks.

Peer Cohorts (Per Segment, With Filing Citations)

Las Vegas Locals / Downtown Las Vegas (reported)

Midwest & South (reported)

Online (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Boyd 8-K, FY2025 · Boyd press release, July 17, 2025

View the full interactive BYD report on boothcheck