Efficiency Stands Out in Casino Stocks
Jefferies analyst David Katz argues that investors in casino stocks, which have been weak in 2026, should look at efficiency rather than scale. According to the analysis, operators with higher EBITDA per room are in a stronger position.
This year casino stocks have mostly been going through a difficult period. Even so, for investors looking for recovery potential, Jefferies analyst David Katz points to one standout measure: efficiency.
Katz says operators focused on a premium strategy may deserve high valuations. He cites the Las Vegas Strip as a good example of this. According to Katz, the market has now become a lodging and entertainment business supported by gaming.
Based on Katz's estimates, Wynn Resorts is expected to generate $180,000 in EBITDA per room this year. That is well below the estimated figures for Caesars Entertainment at $83,000 and MGM Resorts at $77,000. Although MGM and Caesars are the two largest operators on the Strip, they trail Wynn in earnings per room.
The same metrics apply to regional casino companies. Katz says Monarch Casino & Resort and Red Rock Resorts score well in this area. Monarch's two-property model and Red Rock's focus on the local Las Vegas market are viewed as positive traits.
Katz believes future stock performance will depend less on expansion and more on the ability to earn more from existing rooms and gaming positions.
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