Gaming and hospitality company Boyd Gaming (NYSE: BYD) met Wall Street’s revenue expectations in Q1 CY2026, but sales were flat year on year at $997.4 million. Its non-GAAP profit of $1.60 per share was 6.7% below analysts’ consensus estimates.

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Keith Smith, President and Chief Executive Officer of Boyd Gaming, said: "Our first-quarter results reflect the benefits of our diversified business, our successful focus on operating efficiencies and our ongoing capital investment program. On a property-level basis, we achieved year-over-year revenue and Adjusted EBITDAR growth, as property margins once again exceeded 39%. These results were supported by continued growth in play from both core and retail customers on a Companywide basis, driven by broad-based strength in our Midwest & South segment. During the quarter we continued to invest in enhancing our properties and building our development pipeline. We opened Cadence Crossing Casino, our newest Las Vegas Locals property, and continued development of our $750 million resort in Virginia. We also secured regulatory approval for our proposed expansion and modernization of our Par-A-Dice property in Illinois, and plan to begin construction on this project next year. At the same time, we maintained our robust program of returning capital to our shareholders, with nearly $170 million in share repurchases and dividends during the first quarter. Looking ahead, we believe that our strong balance sheet, diversified portfolio, balanced approach to capital allocation and experienced management team all position us well to continue creating long-term value for our shareholders."

Company Overview

Run by the Boyd family, Boyd Gaming (NYSE: BYD) is a diversified operator of gaming entertainment properties across the United States, offering casino games, hotel accommodations, and dining.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Boyd Gaming grew its sales at a 12.7% annual rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the consumer discretionary sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Boyd Gaming’s recent performance shows its demand has slowed as its annualized revenue growth of 4.7% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. Note that COVID hurt Boyd Gaming’s business in 2020 and part of 2021, and it bounced back in a big way thereafter.

We can dig further into the company’s revenue dynamics by analyzing its most important segment, Gaming. Over the last two years, Boyd Gaming’s Gaming revenue (casino games) averaged 54.2% year-on-year growth. This segment has outperformed its total sales during the same period, lifting the company’s performance.

This quarter, Boyd Gaming’s $997.4 million of revenue was flat year on year and in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 1.2% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and implies its products and services will face some demand challenges.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Boyd Gaming’s operating margin has shrunk over the last 12 months and averaged 20.1% over the last two years. The company’s profitability was mediocre for a consumer discretionary business and shows it couldn’t pass its higher operating expenses onto its customers.

In Q1, Boyd Gaming generated an operating margin profit margin of 16.4%, down 3.7 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Boyd Gaming’s EPS grew at 56.4% compounded annual growth rate over the last five years, higher than its 12.7% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t improve.

In Q1, Boyd Gaming reported adjusted EPS of $1.60, down from $1.62 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects Boyd Gaming’s full-year EPS of $7.40 to stay about the same.

Key Takeaways from Boyd Gaming’s Q1 Results

We struggled to find many positives in these results. Its EPS missed and its adjusted operating income fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 5.7% to $84.03 immediately after reporting.

The latest quarter from Boyd Gaming’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).