Everi Holdings Inc (EVRI)

Everi Holdings Inc. (NYSE: EVRI): A Comprehensive Overview

Company Profile:

History and Background: Everi Holdings Inc. (EVRI) emerged from the 2013 acquisition of Multimedia Games Holding Company by Scientific Games. The company then became known as SHFL entertainment, focusing on slot machines and table games. In 2018, it was renamed Everi Holdings Inc. and entered the FinTech industry through its Games and Financial Technology segments. Today, the company operates in over 80 countries, offering a diverse range of gaming, financial technology, and hospitality solutions.

Core Business Areas: Everi operates through three segments:

• Games: This segment develops and manufactures gaming cabinets, electronic gaming machines, and table games for land-based casinos, tribal casinos, and other gaming establishments worldwide.
• Financial Technology: This segment provides FinTech solutions, including cash access, self-service kiosks, and loyalty programs for gaming operators, financial institutions, and retail businesses.
• Hospitality: This segment offers cashless and mobile solutions for hospitality establishments, including bars, restaurants, and hotels.

Leadership and Corporate Structure: Michael Rumbolz serves as Everi's Chairman and Chief Executive Officer. The company has a nine-member Board of Directors and a diverse leadership team with experience in gaming, technology, and finance.

Top Products and Market Share:

• Top Products: Everi's top products include its gaming cabinets (Empire Flex, Empire DCX), FinTech solutions (Passport, Connect), and hospitality solutions (EVERI Pay, EV Connect).
• Market Share:
  • Gaming: Everi holds approximately 5% market share in the US gaming machine market, competing with industry giants like IGT and Aristocrat Leisure.
  • FinTech: The company holds a significant market share in the casino cash access market, particularly in tribal casinos.
  • Hospitality: Everi's cashless and mobile solutions are gaining traction in the hospitality industry, competing with companies like Verifone and Ingenico.

Total Addressable Market: Everi operates in a vast addressable market. The global gaming market is estimated to be worth over $264 billion, while the global FinTech market is expected to reach $305 billion by 2025. The company also targets the hospitality market, which is valued at over $5.8 trillion.

Financial Performance:

Recent Financial Statements:

• Revenue for the fiscal year 2022 was $857.7 million, a 16% increase compared to the previous year.
• Net income was $89.8 million, with a net income margin of 10.5%.
• Earnings per share (EPS) for the year was $1.29.
• The company has a strong balance sheet with $366.9 million in cash and equivalents and a total debt of $895.1 million.

Year-over-Year Financial Performance: Everi has demonstrated consistent revenue and earnings growth in recent years. However, its profitability has been impacted by higher operating expenses and investments in growth initiatives.

Cash Flow and Balance Sheet: Everi generates positive operating cash flow, which helps fund its investments and debt obligations. The company has a moderate debt-to-equity ratio of 1.7, indicating manageable financial leverage.

Dividends and Shareholder Returns:

Dividend History: Everi has a history of paying dividends since 2019. The current annual dividend yield is approximately 1.2%, with a payout ratio of around 30%.

Shareholder Returns: Over the past year, EVRI stock has returned approximately 18%. Over a five-year period, the total shareholder return is approximately 60%.

Growth Trajectory:

Historical Growth: Everi has experienced consistent revenue and earnings growth over the past five years. This growth was driven by strong demand for its gaming and FinTech solutions, as well as strategic acquisitions.

Future Growth Projections: The company expects continued growth in its core business segments. Additionally, new product launches and international expansion initiatives are expected to contribute to future growth.

Market Dynamics:

Industry Trends: The gaming industry is undergoing rapid technological advancements, with a growing focus on online and mobile gaming. The FinTech industry is also experiencing significant changes, driven by the rise of digital payments and blockchain technology.

Everi's Positioning: Everi is well-positioned to capitalize on these trends through its innovative product offerings and focus on international expansion. The company is also investing in research and development to stay ahead of the curve in terms of technological advancements.

Competitors:

Key Competitors:

• Gaming: IGT (IGT), Aristocrat Leisure (ALL), Konami Gaming (KONG)
• FinTech: Global Payments (GPN), Fidelity National Information Services (FIS), Shift4 Payments (FOUR)
• Hospitality: Verifone (PAY), Ingenico (ING), NCR Corporation (NCR)

Competitive Advantages:

• Strong brand recognition in the gaming industry
• Diversified business model across gaming, FinTech, and hospitality
• Extensive global reach
• Focus on innovation and product development

Competitive Disadvantages:

• Relatively smaller market share compared to some industry giants
• Higher operating expenses
• Intense competition

Potential Challenges and Opportunities:

Challenges:

• Supply chain disruptions due to global events
• Technological disruptions in the gaming and FinTech industries
• Intense competition from established players

Opportunities:

• Expansion into new markets, particularly in Asia and Latin America
• Introduction of innovative new products and solutions
• Strategic acquisitions and partnerships

Recent Acquisitions:

• June 2020: Acquired IGT's cashless gaming business, strengthening its FinTech solutions segment and expanding its presence in the tribal gaming market.
• June 2021: Acquired Micro Gaming Technologies, a provider of cashless gaming solutions for bars and restaurants, bolstering its presence in the hospitality market.

These acquisitions align with Everi's strategy to diversify its business, expand its product offerings, and enter new markets.

AI-Based Fundamental Rating:

Rating: 7/10

Justification: Everi is a financially sound company with a diversified business model and strong growth potential. However, it faces challenges from intense competition and technological disruptions.

AI Analysis: The AI analysis considers various financial metrics, market trends, and competitor analysis to arrive at the rating.

Sources and Disclaimers:

Sources:

• Everi Holdings Inc. Investor Relations website
• SEC filings
• Market research reports

Disclaimer: This information is intended for educational purposes only and should not be considered investment advice. Always consult with a qualified financial professional before making investment decisions.

Overall Summary:

Everi Holdings Inc. is a promising company with a strong track record of growth and a diversified business model. The company is well-positioned to capitalize on various opportunities in the gaming, FinTech, and hospitality markets. However, it faces challenges from intense competition and technological advancements. Investors should carefully consider these factors before making an investment decision.