$63.90
$142.66
bear $63.90
base $96.06
bull $142.66
margin of safety $60.00
market price* $70.04
Boyd Gaming runs regional casinos: the Las Vegas Locals properties (Suncoast, Orleans, Gold Coast, Sam's Town, Aliante and Cadence Crossing, which replaced the small Jokers Wild casino in March 2026), three Downtown Las Vegas casinos, and a Midwest & South group across Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri and Pennsylvania. It also earns fees for managing the Sky River Casino near Sacramento for the Wilton Rancheria tribe, runs a small online gaming business, and is building a $750 million casino resort in Norfolk, Virginia, where a small temporary casino opened in November 2025 and the full resort is due in late 2027. In July 2025 Boyd sold its 5% stake in FanDuel for $1.758 billion and used the cash to pay down bank debt. How we measure earnings. We start from the cash Boyd's operations generate, strip out short-term swings in working capital, and subtract stock pay and the capital spending needed to keep the properties competitive. Because Boyd has debt, we value the business before its lenders are paid and then subtract what it owes. Two corrections to our earlier figures matter. First, Boyd pays about $90 million a year of rent on casinos it leases (mostly from real-estate landlords); our previous numbers accidentally added that rent back, overstating cash earnings. Second, we now count as growth spending only the share of capital spending that matches revenue growth, so the big construction years (the Treasure Chest rebuild, Cadence Crossing and Norfolk) weigh on the recorded figures. The restated cash earnings were about $727 million in 2022, $571 million in 2023 and $556 million in 2024, or $871 million, $738 million and $729 million before interest. 2025 is left out of our starting point: it carried roughly $360 million of tax on the FanDuel sale gain and over $300 million of Norfolk and Cadence Crossing construction, neither of which reflects normal operations. 2020 (COVID closures) and 2021 (the reopening surge) are also left out. Starting level. The 2022-2024 middle value is about $738 million a year before interest. Two dated changes lower it. In the FanDuel deal Boyd gave up its old market-access agreements for new ones at lower rates. Online profit fell from $107.6 million in 2024 (which included $32.1 million of one-time fees) to $63.1 million in 2025, and the full-year effect continues, costing about $40 million a year after tax. Recent results confirm the lower level. Excluding the tax payment on the sale, operating cash before interest was about 3% lower in the first half of 2026 than a year earlier on flat revenue, and 2025 operating income fell even before impairments. We therefore value the owned casinos, online and route businesses at about $590 million a year before interest, after about $325 million of yearly upkeep spending (management's own estimate is $250 million plus $75 million of room renovations). Sky River fees ($98.9 million in 2025, roughly $76 million after tax) are valued separately. That is a 3% dip from the comparable 2025 level, in line with the first-half 2026 trend. 2025's steeper drop is not carried forward because it came from the one-time 2024 fees and a single reset of the FanDuel fees, both now fully in the numbers. What we credit and what we leave out. Norfolk is credited because the license was granted in October 2025 and construction is funded and under way. We deduct roughly $450 million of remaining construction cost over the next two years and credit a ramp to about $60 million a year of cash earnings by 2029/30, net of the Pamunkey tribal partners' share. We assume Sky River fees end when the seven-year management term that began in August 2022 runs out in 2029, since no renewal has been disclosed. The Kansas Star management contract has already been renewed for 15 years from December 2026, so it runs in all cases. We credit no growth from the Par-A-Dice rebuild (still awaiting approval), from Cadence Crossing (a replacement, not an addition) or from share buybacks, which move value between shareholders rather than create it. Base case: the core casinos hold at about $590 million a year for ten years. Norfolk ramps to $60 million, and Sky River fees stop in 2029. After year ten, earnings decline about 1% a year. That reflects Boyd's record of repeated write-downs at weaker properties (2020, 2022, 2023 and $128 million in 2025) and the closure of Sam's Town Tunica in November 2025. Limited-license markets and a 50-year operating history support the earnings lasting. The business is worth about $9.6 billion ($131 per share). Boyd owes about $2.64 billion: $1.0 billion of 4.75% notes due December 2027, $900 million of 4.75% notes due 2031 and $741 million drawn on its bank line at June 30, 2026. The below-market coupons on the notes reduce that burden by about $66 million, to about $2.58 billion ($35 per share). The shares are worth about $96. Bear case (roughly the 1-in-10 downside): a consumer pullback cuts core cash earnings about 20%, to $470 million, in 2027-2028. Fixed rent, labor and property costs do not shrink with revenue. Earnings recover only to about $510 million, Norfolk earns just $25 million against the nearby Portsmouth casino, and earnings decline 2% a year after year ten. The $1.0 billion of notes due December 2027 are refinanced at about 7.5%, adding roughly $58 million to the cost of the debt. Even in this case, cash flow covers interest more than twice over, so shareholders are not wiped out. The business is worth about $7.3 billion ($100 per share) against about $2.63 billion owed ($36 per share), leaving about $64 per share. Bull case (roughly the 1-in-10 upside): core earnings start near the 2022-2024 level at $620 million and grow 2% a year for a decade. That extends the gaming-revenue growth seen in 2025, when slot play rose 2.8%. Sky River fees grow with its expansion until the term ends, Norfolk reaches $90 million, and earnings hold flat after year ten. The business is worth about $13.0 billion ($178 per share) against about $2.58 billion owed, or about $143 per share. What changed since our previous estimate of $172. That estimate valued earnings after interest without subtracting the roughly $2.6 billion of debt, which alone was worth about $35 per share. It also counted the lease rent as cash earnings and assumed modest growth continuing indefinitely. Working against the decline, the FanDuel proceeds retired about $1.7 billion of debt, and the low fixed coupons on Boyd's notes now reduce the debt burden. The margin-of-safety price is about $60, a discount of close to 40% to the base value. It sits just under the bear case because this is a cyclical, consumer-discretionary business with meaningful fixed rent and borrowings still rising to fund Norfolk and buybacks. The estimate is wrong if Las Vegas locals and regional gaming volumes fall more than the 2020-style shocks we allow for, if Norfolk loses heavily to Portsmouth, or if Sky River is renewed on good terms (upside). One item we could not fully reconcile: the first-half 2026 cash-flow statement shows little income tax paid even though the large tax liability from the FanDuel sale left the balance sheet, so we removed that payment through working capital rather than relying on the tax line.