Investment Analysis Report: EVRI

Overview

In this investment analysis report, we will delve into the financial statements of Everi Holdings Inc. (EVRI), a company operating in the Consumer Services sector within the Casinos/Gaming industry. We will analyze the company's financial health, earnings and revenue growth, profitability, operating margin, operating cash flow, capital expenditure trends, and efficiency. By examining the balance sheets, income statements, and cash flow statements provided, we aim to provide a comprehensive evaluation of EVRI as an investment opportunity.

Balance Sheets Analysis

Key Observations:

1. Total Assets: EVRI's total assets have shown a consistent increase over the past three years, from $1.55 billion in 2020 to $1.92 billion in 2022.

2. Total Liabilities: The company's total liabilities have also been on an upward trend, reaching $1.70 billion in 2022.

3. Shareholders' Equity: Shareholders' equity has fluctuated over the years, with a slight decrease in 2022 compared to 2021.

4. Goodwill and Intangible Assets: EVRI has significant goodwill and intangible assets on its balance sheet, indicating acquisitions or investments in intangible assets.

Opinions:

• The increase in total assets reflects the company's growth and expansion efforts.
• The rise in total liabilities suggests increased debt levels, which may impact the company's financial leverage.
• The fluctuation in shareholders' equity warrants further investigation into the company's capital structure and profitability.

Income Statements Analysis

Key Observations:

1. Total Revenue: EVRI's total revenue has shown steady growth over the past three years, reaching $792 million in 2022.

2. Net Income: The company's net income has fluctuated, with a decrease in 2022 compared to 2021.

3. EBITDA: EVRI's EBITDA has shown an increasing trend, indicating improved operational performance.

4. EPS Diluted: The company's earnings per share diluted have varied over the years, with a slight decrease in 2022.

Opinions:

• The consistent growth in total revenue reflects the company's ability to generate sales and expand its business.
• The fluctuation in net income raises concerns about the company's profitability and cost management.
• The increasing EBITDA suggests improved operational efficiency and profitability.

Cash Flow Statements Analysis

Key Observations:

1. Operating Cash Flow: EVRI's operating cash flow has shown fluctuations over the past three years, with a decrease in 2022 compared to 2021.

2. Free Cash Flow: The company's free cash flow has also varied, indicating changes in capital expenditure and cash management.

3. Ending Cash: EVRI's ending cash balance has remained relatively stable over the years, providing liquidity for operations and investments.

Opinions:

• The fluctuations in operating cash flow and free cash flow require further analysis to understand the company's cash generation and utilization.
• The stable ending cash balance indicates a healthy liquidity position, which is essential for meeting short-term obligations and strategic investments.

Investment Analysis and Recommendations

Based on the analysis of EVRI's financial statements, several key insights can be drawn:

1. Valuation: EVRI's market capitalization of $946 million reflects the company's size and market value within the gaming industry. The enterprise value has fluctuated over the years, indicating changes in the company's overall worth.

2. Financial Health: The company's balance sheet shows a healthy growth in total assets, but increasing liabilities raise concerns about debt levels and financial leverage.

3. Earnings and Revenue Growth: EVRI has demonstrated consistent revenue growth, but fluctuating net income suggests challenges in maintaining profitability.

4. Profitability: The company's EBITDA and net margin indicate improvements in operational efficiency, but the decline in net income raises questions about overall profitability.

5. Operating Margin and Operating Cash Flow Analysis: Fluctuations in operating cash flow and operating margin require further investigation to assess the company's operational performance and efficiency.

6. Capital Expenditure Trends and Efficiency: The company's capital expenditure trends and efficiency in utilizing resources need to be analyzed to determine the effectiveness of investments and growth strategies.

Investment Recommendation:

Based on the analysis of EVRI's financial statements and key trends, the overall viewpoint is [Neutral]. While the company has shown growth in revenue and assets, concerns about profitability, debt levels, and cash flow fluctuations warrant caution. Investors should closely monitor EVRI's financial performance, operational efficiency, and strategic decisions before making investment decisions. Further research and analysis are recommended to gain a deeper understanding of the company's fundamentals and market dynamics.

In conclusion, EVRI presents both opportunities and risks as an investment option in the gaming industry. Investors should conduct thorough due diligence and consider the company's financial health, growth prospects, and industry trends before making investment decisions.