What Happened?
Shares of luxury casino and resort operator Monarch (NASDAQ: MCRI) fell 4.3% in the morning session after the company reported mixed third-quarter financial results, with an earnings beat overshadowed by a revenue miss.
For the quarter, Monarch's net revenue was $142.8 million. While this marked a 3.6% increase from the same period last year, it fell short of analyst expectations of $145.5 million. In contrast, the company's profitability was a bright spot, with diluted earnings per share of $1.69 comfortably surpassing the consensus estimate of $1.57. The stock's negative reaction suggested that investors were more concerned with the top-line shortfall than the otherwise strong profit growth.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Monarch? Access our full analysis report here.
What Is The Market Telling Us
Monarch’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 22% on the news that the company reported record financial results for the second quarter of 2025, significantly beating analyst expectations.
The casino operator announced record net revenue of $136.9 million, a 6.8% increase year-over-year, and a 19.1% jump in net income to $27 million. Diluted earnings per share (EPS) came in at $1.44, handily beating the consensus estimate of $1.22. The strong performance was driven by a 12.1% surge in casino revenue. The company's Adjusted EBITDA, a key measure of profitability that excludes interest, taxes, depreciation, and amortization, rose 16.8% to a record $51.3 million. CEO John Farahi credited the results to operational efficiencies and market share gains at its properties in Reno, Nevada, and Black Hawk, Colorado.
Following the strong report, Wall Street analysts reacted positively. Wells Fargo upgraded the stock from "Underweight" to "Equal Weight" and raised its price target to $89, citing consistent performance and a strong free cash flow profile. Stifel also increased its price target from $81 to $92.
Monarch is up 18.5% since the beginning of the year, but at $92.16 per share, it is still trading 14.8% below its 52-week high of $108.21 from July 2025. Investors who bought $1,000 worth of Monarch’s shares 5 years ago would now be looking at an investment worth $2,081.
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