MONARCH CASINO & RESORT, INC (MCRI): what the price assumes

In the published model solve dated 2026-Q2, anchored at $122.34, MONARCH CASINO & RESORT, INC (MCRI) is priced for +11.9% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.

Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/MCRI

Headline

FieldValue
TickerMCRI
CompanyMONARCH CASINO & RESORT, INC
Current price$122.34/sh
CompositionCasino 58% / Food and beverage 24% / Hotel 14% / Other 5%

What The Price Assumes (Inversion)

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

FieldValue
Inversion basiswhole-company
Implied growth11.9%
Multiple paid17x operating income

Solve inputs: computed at a 9.3% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.4pp.

How unusual the bet is: within-range

ReferenceValue
vs own history-0.37σ
sustained it ~5 years at this level51%
implied end-window share0%

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

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
Asset1.58x4expensive
Earnings1.37x4expensive
Relative1.56x5expensive
Growth0.90x3justifies

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

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.

Per-Model Detail (n=16)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$176.990.69xyesFCF base $0.2B, growth 6% (input: historical growth), terminal g 4.0%, WACC 9.2%, 6yr projection
DCF Exit MultipleGrowth$135.410.90xyesExit EV/EBITDA: 41.0x / 43.0x / 45.0x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$88.351.38xyesP/E 18x (static sector reference · 2026-04), scenarios: 15.0x / 18.0x / 21.0x (bear / base = reference held flat / bull), EV/EBITDA 21.31x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$66.461.84xyesBV/sh $30.98, ROE (TTM) 19.8%, ke 9.3%
Two-Stage Excess ReturnAsset$96.331.27xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$94.151.30xyesRev $0.6B, growth 6% (input: historical growth; tapered), Terminal P/S: 3.3x / 3.9x / 4.5x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$70.801.73xyesEPS $5.90, growth 1% (input: historical EPS growth), PEG=16.56 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset$93.391.31xyesBV $30.98 + 5yr PV of (ROE (TTM) 19.8% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$64.131.91xyes√(22.5 × EPS $5.90 × BVPS $30.98) — Graham's conservative floor
EV/EBITDA RelativeRelative$32.593.75xyesEBITDA $0.05B × sector EV/EBITDA 12.0x
FCF YieldEarnings$92.121.33xyesFCF $154.7M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$87.111.40xyesSBC-adj FCF $0.15B (FCF $0.15B − SBC $0.01B) capitalized at Kₑ
Ben Graham FormulaEarnings$190.370.64xyesEPS $5.90 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$78.351.56xyesRevenue $0.56B × sector P/S 2.5x
PEG Fair ValueRelative$221.250.55xyesEPS $5.90 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$63.781.92xyesEPS $5.90 / 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 cash$0
Net debt / NOPAT (after-tax)0.00x
Net debt / operating income (pre-tax)0.00x
Share count CAGR (buyback)-1.8%
Burning cashno

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

Monarch is a two-property casino operator (the Atlantis in Reno, the Monarch in Black Hawk, Colorado) past its big build-out and now in harvest mode. At about $131 the price prices in roughly 24% annual operating-profit growth for five years, well above the high-single-digit revenue pace the business has been running.

The quarter was strong. Q1 2026 net revenue rose 8.9% to $136.6 million, adjusted EBITDA jumped 19% to $49 million, and diluted EPS climbed 45% to $1.52, beating the $1.16 estimate. The company gained market share at both properties.

The balance sheet is clean (no credit-facility borrowings, $120 million cash), but the price already discounts the operating-leverage story, and a $78.5 million construction-litigation liability sits on the books under appeal.

Bull Case

Read Monarch through its stage and the numbers start to make sense. This is a mature, self-funded regional casino operator that finished its heavy capital cycle (the Black Hawk expansion) and is now converting a fixed asset base into rising margins and cash. That stage is exactly when operating leverage shows up, and Q1 2026 is what it looks like: net revenue up 8.9% to $136.6 million, adjusted EBITDA up 19% to $49 million, and diluted EPS up 45% to $1.52 against a $1.16 estimate. Revenue grew high single digits while EBITDA grew nearly three times that, which is the signature of a business spreading more spend over the same plant.

The asset is concentrated but high quality, and the filing makes the durability case concrete. The Atlantis sits on owned Reno real estate with adjacent parcels held for expansion: the 10-K describes a site that "is suitable and available for future expansion of the Atlantis facilities, parking, or complementary resort casino" and a second "approximately 2.6-acre site across Virginia Street from the Atlantis." Owning the land and the optionality around it means the moat is partly physical: a competitor cannot easily replicate two entrenched properties with built-in room to grow. Management gained market share at both Atlantis and Black Hawk this quarter, which says the properties are taking demand rather than just riding a strong consumer.

The capital story is conservative and shareholder-friendly, which lowers the risk of paying up. As of March 31, 2026 the company held $120.1 million in cash with no borrowings on its credit facility, so the balance sheet carries essentially no net debt. Management pays a $1.20 annual dividend and bought back 181,258 shares for $17.6 million in Q1 alone, on top of $72.2 million repurchased across 2025. The share count is shrinking about 1.8% a year. The inversion solves to a first-year return on invested capital near 25% fading to about 22%, on a normalized operating margin of roughly 17.7%. A debt-free operator earning mid-20s returns on capital, taking share at both properties, and returning cash is a credible reason the market is willing to look past the static multiples.

Bear Case

The bear case starts with the variable Monarch cannot control: the regional consumer. Both properties live or die on discretionary visitation to Reno and the Denver-area gaming market, and that demand is the most macro-sensitive part of the thesis. Gaming spend is one of the first lines households cut when employment softens or real income tightens, and Monarch has no geographic diversification to cushion a downturn in either market. The current price does not reflect that exposure. At about $131 the market is paying roughly 24 times operating income, which implies about 24% annual operating-profit growth for five years. That is a recovery-or-boom assumption embedded into a regional operator whose own recent revenue growth is closer to high single digits, and only about 32% of comparable fast-growers sustained a 24% pace for five years.

The valuation math is unforgiving once you step off the growth-DCF. Most of the model families land well below the price: simple excess return at about $65, the Graham number at $63, relative valuation at $88, EV/EBITDA relative at just $32. The blended X-ray sits near $91 against a $131 price, and the reasonable inversion range runs from about $68 at the low end to $124 at the high end, with a base near $77. In other words, almost every conservative frame says the stock is already ahead of itself, and only the most optimistic forward model reaches the tape.

There is also a real, quantified overhang in the filings. The company carries a recorded liability of $78.5 million tied to the PCL construction litigation from the Black Hawk build, and that matter remains under appeal. An adverse outcome would be a direct cash hit roughly two-thirds the size of the entire cash balance. Layer that onto the macro sensitivity and the rich multiple, and the bear conclusion is straightforward: this is a good operator priced for a growth rate it has not demonstrated, with a single-market demand profile and an unresolved legal liability, none of which a buyer at 24 times operating income is being paid to absorb.

Valuation

The valuation is a wide spread that mostly sits below the price. The conservative families cluster low: simple excess return at $65, Graham number at $63, earnings yield at $64, relative valuation at $88. The growth-DCF reaches higher (perpetual-growth DCF at $172), and the PEG-style frames stretch furthest, but the central tendency is clearly under the market. Inverting the price says the same thing: at $131 the market pays about 24 times operating income, implying roughly 24% annual operating-profit growth for five years at a 9.4% cost of capital and a 4% terminal rate.

One measurement nuance is worth flagging because it changes the read. The inversion prices off a record-basis trailing operating income near $96 million, while the EDGAR quarterly TTM strip reads about $41 million, and management reports the normalized figure around $98.6 million at a roughly 17.7% mid-cycle margin. These are different measurement bases, not a contradiction, but the implied growth is anchored to the higher, normalized number. The reasonable range from the inversion runs from about $68 low to $124 high, with a base near $77.

Net, the conservative models say Monarch is already valued ahead of its asset and earnings power, and the price leans entirely on the durability of the post-expansion margin ramp. The reliability of the solve is rated ok, and the sensitivity is steep: each one-point move in the cost of capital shifts the implied growth about 7.6 points, so a higher-rate environment quickly makes the embedded assumption look more demanding.

Catalysts

Q1 2026 (reported April 21) was a record quarter: net revenue up 8.9% to $136.6 million (beating the $129.75 million estimate), adjusted EBITDA up 19% to $49 million, net income up 38.9% to $27.6 million, and diluted EPS up 44.8% to $1.52 against a $1.16 estimate. The company increased market share year over year at both the Atlantis and Monarch Black Hawk.

Capital returns continued. The $1.20 annual dividend ($0.30 quarterly, paid March 16) remains in place, and Monarch repurchased 181,258 shares for $17.6 million in the quarter, following $72.2 million of buybacks across 2025. As of March 31, 2026 the company held $120.1 million in cash with no credit-facility borrowings.

Analyst sentiment is mixed and skews cautious on valuation. Recent coverage shows a roughly $88 average target with a high near $100 and a low near $81, and a split of about 3 Buy, 4 Hold, and 2 Sell ratings, several of which sit below the current price.

The overhang to watch is the PCL construction litigation, a recorded $78.5 million liability still under appeal; resolution either way is a catalyst. Beyond that, the swing factors over the next few quarters are regional visitation trends in Reno and Black Hawk, continued market-share gains, and whether the operating-leverage margin ramp holds.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (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.

View the full interactive MCRI report on boothcheck