Manufacturer of gaming technology services and products Global Gaming Technology (NYSE:IGT) the stock has held up relatively well in 2022 despite the massive sell-off in benchmarks. While the Omicron variant impacted some markets with labor shortages, supply chain pressures and cost inflation, IGT still managed to generate its highest ever EBITDA. history of the company while reducing its debt ratio to 3.5X. Once the epicenter of stock during the pandemic, the reopening has been a boon further accelerated by the spread of sports betting and the legalization of iGaming. Although the company has minimal direct exposure to Russia and Ukraine, the ripple effect across Europe is yet to be seen. Cautious investors looking for exposure in a one-stop-shop for global gambling can watch IGT for opportunistic pullbacks.
Publication of results for the fourth quarter of fiscal 2021
On March 1, 2022, IGT released its fourth quarter fiscal 2021 results for the quarter ended December 2021. The company reported earnings per share of $0.09, excluding analyst consensus estimates for earnings of $0.35 per (-$0.26). Revenue rose 18.6% year-over-year (YoY) to $1.05 billion, beating consensus analyst expectations for $1.02 billion. IGT generated the highest operating profit in company history at $902 million, with more than $1 billion in cash from operations and $770 million in free cash flow. The company reduced its net debt by (-$1.4 billion) by improving leverage to 3.5 times, which is the lowest in the company’s history. The quarterly dividend was restored to $0.20 cash per share. IGT CEO Vince Sadusky commented, “Our 2021 financial results reflect the best performance in revenue, earnings and cash flow over the past four years, meeting or exceeding target levels thanks to strong performance across the portfolio. We have made significant progress on several strategic objectives, and I am delighted to lead IGT through the next chapter of its evolution. We have set aggressive but achievable multi-year goals and we have a focused strategy to maximize value for all stakeholders.
Advice on mixed income
The company confirms that the online revenue forecast for the first quarter of fiscal 2022 will be between $1 billion and $1.1 billion compared to analyst consensus estimates of $1.04 billion. The company expects fiscal 2022 revenue to be between $4.1 billion and $4.3 billion from $4.21 billion.
Takeaways from the conference call
CEO Sala set the tone: “Our mission is to strengthen IGT’s global leadership position in the regulated gaming industry by delivering innovative content services and solutions. This is the foundation of our strategy to grow revenues and margins across all segments, while increasing operational efficiency and optimizing capital allocation. He pointed out that the company is well positioned in markets experiencing digital growth and secular tailwinds. Its portfolio is both complementary and actionable for lotteries, slots, iGaming and sports betting. The company divested its commercial services in Italy for more than 15 times EBITDA, as the proceeds will be used for other possible acquisitions and debt reduction. Its Global Lottery segment reported 20% year-over-year growth in same-store sales. iLottery similar store sales grew 60% in 2021. Instant lottery ticket services saw a 35% increase in standard units produced. Its resort portfolio has received Nevada regulatory approval, enabling the company’s cashless gaming solutions to be deployed. Its sports gaming platform powers more than 60 sites in 20 states.
IGT price trajectories
Using rifle charts on weekly and daily timeframes allows an accurate view of the price development of IGT shares. The weekly Rifles chart peaked near $33.03 Fibonacci level (fib) and proceeded to sell in a choppy fashion to the low near the $21.01 fib, the weekly rifle chart was choppy with the weekly 5-period moving average (MA) at $26.72 constantly crossing the MA over 15 periods at $27.16 both up and recently down. The lower weekly Bollinger Bands (BB) lie at $21.50 as they begin to develop. The weekly stochastic is back below the 60 band. The weekly weak market structure (MSL) buy triggers on a break above $27.05. The daily carbine chart has a hit or a break as the downtrend stagnates on a 5-period rising MA at $23.76 tightening towards the 15-period MA at $24.65 and the 200-period MA at $25.35 and the 50-period MA at $27.06. The daily Stochastic has bounced through the 20 band. The daily BB lower is compressing to $18.44. Cautious investors can expect opportunistic pullback levels at the $23.30, $22.52, $21.46, $20.36, $19.11 and $17.31 levels. The upward trajectories range from the $28.82 fib level to the $39.51 fib level.