Large enterprise Monarch demonstrates impressive financial results, according to Truist analyst's assessment, dubbing it as 'monster' quarter.
Monarch Casinos Shines in Q2 2021, Boasting Strong Gaming Performance and Market Share Gains
In Q2 2021, Monarch Casinos demonstrated a robust performance, with notable gains in casino operations and market share in both Colorado and Nevada. This success was coupled with significant hotel renovations and favourable financial results.
The Black Hawk, Colorado property, a key asset in Monarch's portfolio, continued to increase its market share. Particularly, the casino attracted mid-to-upper-tier guests from the Denver and Boulder metro areas.
Meanwhile, in the Reno, Nevada area, Monarch's Atlantis property underwent a $100 million redesign and upgrade of hotel rooms. This renovation propelled Atlantis to the top spot as the No. 1 hotel in Reno by U.S. News & World Report in 2025, reflecting improved guest experiences and occupancy potential.
Financially, Monarch Casinos reported a 6.8% year-over-year revenue growth to approximately $136.9 million and a 19.1% increase in net income to about $27 million for the quarter. Casino revenue led this growth with a 12.1% increase, driven by strong gaming results. Hotel revenue softened slightly with a 3.1% decline, attributed to weaker convention and group business.
These results underscore Monarch's gaming operations, supported by strategic market share expansion and capital investments in key properties in Colorado and Nevada during Q2 2021.
While economic tailwinds in Reno are partially offset by new momentum in California tribal casinos, analysts remain optimistic about Monarch's prospects. Jefferies Equity Research analyst David Katz raised his price target on MCRI shares from $84 per share to $96, and Truist Securities analyst Barry Jonas raised his price target on Monarch's stock from $105 per share to $120 apiece.
Monarch's target customer is a mid-to-high-end player, and the casino is performing particularly well in Reno and Black Hawk. In fact, Monarch beat cash-flow estimates by 15 percent in its second-quarter earnings report.
Analysts expect similar second-quarter reports from other regional operators, especially Station Casinos. David Katz projects that Black Hawk should continue to gain market share, given its positioning as the premium property in the underpenetrated Denver market.
Employment levels are healthy, and the stock market is at all-time highs, which management believes are key factors in driving Monarch's revenues. The casino remains confident in its property in the promotional environment, due to its best-in-class offering.
However, David Katz maintains a Hold rating on MCRI shares, citing the absence of another expansion project as a reason for his caution. Monarch, for its part, is being patient with regard to merger or acquisition activity. Despite macroeconomic issues, Monarch's mid-upper end customers seem unfazed, and the casino continues to target Denver customers to discourage them from visiting Las Vegas.
- The success of Monarch Casinos in Q2 2021 was not only limited to gaming performance and market share gains, but also extended to casino culture, with casino games like poker and slot machines seeing a rise in popularity.
- Looking forward, casino trends suggest that lotteries and sports betting may also become significant contributors to Monarch's revenue, given the growing demand for such activities nationwide, particularly in Las Vegas.
- As Monarch continues to expand its market presence and enhance property offerings, it becomes evident that the casino-and-gambling industry is evolving, and Monarch Casinos seems to be at the forefront of this transformation, shaping casino-gambling trends for the future.
