Casino ATM and cash service provider Global Cash Access (GCA) won big on May 7, sporting the most impressive gains in the entire small cap space on the heels of a big earnings win.
GCA had been reeling this year, especially after news last month that major client Caesar’s Palace (CZR) would no longer be doing business with them. But GCA reversed a chunk of the yearly losses with a strong report that saw the company increasing earning, which prompted the experts to take a more positive appraisal of the company.
A big vote in favor of the company’s strategy came from analysts at Craig Hallum, who upgraded shares of the company to “buy.” Investors went gaga after hearing Global Cash was a can’t-miss prospect, opting to let their money ride on the cash servicer with volume more than twice the normal amount on the day.
While lending cash to gamblers sounds like a foolproof business strategy, even the best cash-servicing companies can hit a rough patch now and again. Prior to hitting the earnings jackpot, Global Cash had shed 32.99 percent of their value on the year on declining profits and same-store revenues.
However, the fundamentals always suggested Global Access had a strong chnace to rebound. Global Access received four stars (out of five) and merited inclusion in the Equities.com Small-Cap Stars project, which isolates companies our anlaysts feel sport the strongest chances for high growth.
For their first quarter 2014 earnings report, Global Cash Access reported a net gain of $19.4 million, or $0.22 per share, versus the net gain of $17.9 million, or $0.19 per share, from the same period a year ago. Revenue for the quarter was $150.6 million, as compared to $153.81 million from the previous year. Analysts were expecting a profit of $0.21 per share on revenues of $150.79 million.
Global Access reported that as of March 31, 2014 they had cash and cash equivalents of $194.6 million. Perhaps of greatest interest to investors, the company raised guidance from $0.87 to $0.91 per share for the year, up from $0.82 to $0.87.
By 2:30 EST shares of Global Cash Access had risen 18.96 percent to hit $7.74 a share.
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