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Home / Articles

Accel Entertainment: Recent News & Q2FY23 Performance

12 Jun, 2024
Written by
Elizaveta Latinskaya
Elizaveta Latinskaya
Reviewed by
Aigerim Ercik
Aigerim Ercik
Accel Entertainment: Recent News & Q2FY23 Performance

Accel Entertainment, Inc. (NYSE: ACEL) has recently been in the spotlight due to its notable stock price movements and activities by institutional investors. This article examines the latest news surrounding Accel Entertainment, focusing on key insights from institutional ownership, insider transactions, and shareholder distribution. Additionally, we provide a comprehensive analysis of Accel Entertainment’s Q2FY23 performance based on our team’s detailed report.

Institutional Investors and Shareholder Insights

Accel Entertainment experienced a 6.4% increase in its stock price last week, contributing to its overall one-year return. Institutional investors, who hold about 35% of the company’s shares, played a significant role in this movement. The top six shareholders control 51% of the business, making institutional ownership a critical factor in the company’s stock price sensitivity.

Institutional investors often have a substantial impact on stock prices due to their large holdings. In Accel Entertainment’s case, these investors seem optimistic about the company’s future, as evidenced by their significant ownership. Hedge funds hold 16% of the shares, indicating an interest in driving near-term value. The largest shareholder, Clairvest Group Inc., owns 20% of the shares, followed by Darlington Partners Capital Management, LP (9.7%), and Greenvale Capital LP (6.5%).

Insiders, including CEO Andrew Rubenstein, own 5.1% of Accel Entertainment’s shares, representing a significant portion of the company’s ownership. Insider ownership is generally seen as positive, as it aligns management’s interests with those of shareholders. However, recent insider sales have raised some concerns. These sales can sometimes signal that insiders believe the stock is overvalued or that they need liquidity for personal reasons.

The general public holds 16% of Accel Entertainment’s shares, giving individual investors some influence over the company’s operations. Additionally, private equity firms own 20%, positioning them to shape corporate strategy with a focus on value creation. Private equity firms typically have shorter investment horizons, and their eventual exit could impact the stock price.

Q2FY23 Financial Performance Overview

Our team conducted a thorough analysis of Accel Entertainment’s Q2FY23 performance, revealing several key insights:

1. Revenue and Net Income: Accel Entertainment reported revenue of $292.647 million for Q2FY23, marking a 28% increase compared to Q2FY22. However, net income decreased by 56% to $9.983 million, primarily due to a $4.8 million loss on the change in fair value of contingent earnout shares.

2. Adjusted EBITDA: The company’s adjusted EBITDA rose by 9% to $46.612 million, driven by the acquisition of Century and a 0.4% increase in Illinois same-store sales.

3. Net Debt and Stock Repurchase: Accel ended Q2FY23 with $284.759 million in net debt, a 1% increase from Q2FY22. The company also repurchased approximately $8 million of its Class A-1 common stock during the quarter.

4. Expansion and Acquisitions: The company expanded to 3,655 locations and 23,759 gaming terminals by the end of Q2FY23, reflecting 5% and 7% increases, respectively. Accel also completed multiple acquisitions, including specific assets from Illinois Gaming Entertainment LLC, Rendezvous in Billings, Montana, and gaming assets from DEP, Inc. and River City Amusement Company.

5. Disciplinary Settlement: Accel reached a $1.1 million settlement with the Illinois Gaming Board to resolve a disciplinary complaint, impacting net income and adjusted EBITDA.

Business Outlook and Future Prospects

Looking ahead, Accel Entertainment plans to continue managing its cost structure and maintaining a high level of service. While the company is pessimistic about the legalization of gambling in Missouri, Indiana, and Chicago in the near future, it remains optimistic about potential expansion in North Carolina. The ongoing integration of Century’s operations is expected to drive further market presence and revenue growth. Additionally, Accel has plans for further development in Nebraska.

What’s next for Accel Entertainment?

Accel Entertainment’s recent performance and strategic acquisitions highlight its potential for continued growth in the distributed gaming sector. Institutional and insider activities reflect confidence in the company’s future, despite recent insider sales. The Q2FY23 financial results demonstrate robust revenue growth, though challenges remain in managing net income. As Accel continues to expand its footprint and navigate regulatory environments, it remains a company to watch in the gaming industry.

For a more detailed overview, you can access our comprehensive Accel Entertainment Q2FY23 Report Overview today!

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