\n Posted on: August 27, 2025, 07:19h.\u00a0\n <\/p>\n
\n Last updated on: August 27, 2025, 07:19h.\n <\/p>\n
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- Accel Entertainment is an underfollowed gaming stock, says analyst<\/strong><\/li>\n
- It\u2019s a distributed gaming firm and the shares are cheap compared to other suppliers<\/strong><\/li>\n<\/ul>\n
Among gaming stocks, Accel Entertainment (NYSE: ACEL) leads an arguably anonymous existence. That could be the result of the company operating in a not-so-glamorous niche, a market capitalization of $967.69 million, or both, but one analyst sees opportunity in the shares.<\/p>\n
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The Accel Entertainment logo. An analyst says the stock isn\u2019t getting enough credit. (Image: Accel Entertainment)<\/figcaption><\/figure>\n In a new report to clients, Texas Capital analyst David Bain initiated coverage of Accel, placing a \u201cbuy\u201d rating and $17 price target on the distributed gaming supplier. That price objective implies upside of 47.1% from today\u2019s close.<\/p>\n
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We believe ACEL is an underfollowed\/underappreciated gaming operator, which connects visible free cash flow generation, growth and an undemanding\/discounted valuation,\u201d observes Bain. \u201cACEL\u2019s hyper-local, mostly variable-cost operations leave it better hedged against an economic downturn than most regional casinos, in our view, while forward sales and EBITDA growth outpaces the group average.\u201d<\/p>\n<\/blockquote>\n
The claim that Accel isn\u2019t widely followed in the investment community is accurate. Bain is just the fourth sell-side analyst<\/a> to cover the name. Market history could augur well for Accel because some smaller, under-covered stocks<\/a> have gone on to deliver big returns.<\/p>\n
Accel Entertainment Stock a Steady Growth Story<\/h2>\n
Accel\u2019s business model is easy to understand. It distributes video gaming terminals<\/a> (VGTs) in businesses such as restaurants, bars, taverns, convenience stores, liquor stores, truck stops, and grocery stores. That\u2019s not glamorous, but it doesn\u2019t diminish the company\u2019s growth potential.<\/p>\n
\nIt\u2019s already proving its growth story. In 2019, Accel had a footprint in just one state. Today that total is six and as Bain points out, the company 27,388 VGTs across 4,427 locations at the end of the second quarter. That device tally exceeds that of Red Rock Resorts (NASDAQ: RRR) and is just below that of Boyd Gaming \u2014 two regional casino operators.<\/p>\n<\/div>\n
What Accel lacks in terms of glitz and fanfare comparable to iGaming or online sports betting<\/a>, it makes up for with a prosaic model that could offer long-term predictability and visibility \u2014 attributes often prized by investors.<\/strong><\/p>\n
\u201cDistributed gaming growth is steady in mature markets, while lesser defined\/younger markets offer significant growth potential,\u201d adds Bain. \u201cWe believe distributed gaming\u2019s hyper-local and variable cost structure nature leaves it more resilient than regional casinos in a potential economic downturn. Further, we believe distributed gaming offers unique longer-term geographic expansion potential exceeding that of brick-and-mortar regional casinos. ACEL is particularly positioned to profitably enter new potential markets, offering substantial unmodeled\/uncontemplated forecast\/stock upside, in our view.\u201d<\/p>\n
Accel Entertainment Stock Offers Value, Too<\/h2>\n
- It\u2019s a distributed gaming firm and the shares are cheap compared to other suppliers<\/strong><\/li>\n<\/ul>\n