Why Everi Holdings May Be a Smart Bet Despite Market Uncertainty

Photo of author
Written By Jackson Hartwell

Merger Summary

Credits: DepositPhotos

Everi Holdings Inc. (NYSE: EVRI) is currently trading at a discount due to uncertainties surrounding its proposed merger with IGT’s gaming businesses and recent softness in its gaming fundamentals.

However, Everi holds significant return potential at current market prices, regardless of the merger outcome.

On February 29, 2024, IGT and Everi announced a merger of IGT’s Global Gaming and PlayDigital businesses with Everi to form a diversified gaming and FinTech company.

Following the merger, Everi shareholders will own 46% of the combined entity, while IGT shareholders will hold 54%. The deal values the combined company at a $6.2 billion enterprise value, with net debt/EBITDA expected to be 3.2x – 3.4x at close.

The transaction is anticipated to close later this year or early 2025, subject to regulatory approval, and the combined company will trade on the NYSE under the ticker IGT.

Business Model


Gaming (53% of LTM Revenue): Everi’s gaming business involves creating games and cabinets for commercial and Indian casinos. The company generates earnings through revenue share agreements for leased machines and offers digital gaming solutions to online casinos.

FinTech (47% of LTM Revenue): Everi provides integrated financial services solutions, including cash access and software solutions for casinos. It makes money through transaction fees for cash access solutions, subscription fees for software offerings, and hardware sales to casinos.


Global Gaming (87% of 2023 SpinCo Revenue): IGT’s offerings include cabinets and games, generating revenue predominantly from lease agreements. They also provide comprehensive software solutions to casino operators.

PlayDigital (13% of 2023 SpinCo Revenue): PlayDigital offers digital games and business solutions for iGaming customers and sports betting platforms.

Why This Opportunity Exists

Merger Uncertainty

The complexity of the proposed merger and the need for regulatory approval have catalyzed further stock declines, with Everi’s price down 30% since the announcement.

Fundamental Softness

Recent softness in Everi’s gaming segment is due to strategically replacing older cabinets with newer units to drive higher daily wins per unit (DWPU). Overall DWPU declines result from normalizing back to pre-COVID levels and an aging install base.

Pendulum Swing

The land-based gaming industry rebounded strongly post-pandemic, benefiting Everi from increased foot traffic and casino upgrades. However, as demand tapered, Everi’s revenue growth slowed, resulting in a valuation only seen during the Great Recession and COVID.


MergeCo Specific

Diversified Product Offering: Post-merger, MergeCo will have one of the most comprehensive product portfolios in the gaming industry, providing a one-stop shop for casino operators.

Cross-Selling: The combined company can drive additional revenue by introducing offerings to new markets and customers while accelerating Everi’s international expansion.

CAPEX/IP Synergies: The merger will allow for combined IP portfolios and R&D efforts, creating significant savings for MergeCo.

Everi Specific

Gaming FinTech Monopoly: Everi is essential for casino operations, with high switching costs for its systems. The shift to mobile/cashless solutions will drive efficiency for casinos, allowing Everi to capture the entire casino payments ecosystem.

Gaming Reacceleration: Everi’s strong release schedule for new games and cabinets and continued investment in R&D will aid in accelerating the adoption of new cabinets.

Recurring Revenue: 73% of Everi’s revenue is recurring, helping smooth out hardware sales volatility. Growth in the digital business will likely increase the proportion of recurring revenue.

Capital Allocation: Everi has strategically used free cash flow to reduce long-term debt and repurchase shares while investing in R&D.


Randy Taylor: The current CEO of Everi, who will join the board post-merger, has a strong finance background and has driven significant growth in gaming and FinTech revenues.

Vince Sadusky: The current CEO of IGT, who will become CEO of MergeCo, has maintained post-COVID momentum and driven solid growth in sports betting and digital gaming.

Return Potential

There is significant upside potential for Everi whether the merger is completed or not. The stock trades at a significant discount to peers while boasting better margins, returns on capital, and growth potential.


Competition May Drive ROIC Erosion: If Everi and IGT cannot invest in new games and cabinets, unit penetration could decline, affecting free cash flow.

iGaming/Sports Betting Cannibalization: As iGaming and sports betting grow, patrons may shift away from land-based gaming, disrupting Everi’s FinTech operations.

Continued Gaming Softness: Macro pressures, including inflation and potential recession, could inhibit demand and growth in the industry.

Merger Execution Risk: Merging two large businesses comes with complications that could be costly if not managed effectively.


Credits: DepositPhotos

Everi Holdings represents an asymmetric opportunity for significant returns, regardless of the merger outcome. The company’s organic growth opportunities and discount to peers provide a margin of safety for investors.

While merger uncertainty has weighed on valuation, clarity regarding the transaction will act as a catalyst for Everi stock, whether approved or not.



You should read and understand this disclaimer in its entirety before joining or viewing the website or email/blog list of SmallCapStocks.com (the “Publisher”). The information (collectively the “Advertisement”) disseminated by email, text or other method by the Publisher including this publication is a paid commercial advertisement and should not be relied upon for making an investment decision or any other purpose. The Publisher is engaged in the business of marketing and advertising the securities of publicly traded companies in exchange for compensation. The track record, gains, upside, and/or losses mentioned in the Advertisement, if any, should not be considered as true or accurate or be the basis for an investment. The Publisher does not verify the accuracy or completeness of any information included in the Advertisement. While the Publisher does not charge for the SMS service, standard carrier message and data rates may apply. To unsubscribe from receiving promotional text messages to your phone sent via an autodialer, using your phone reply to the sender’s phone number with the word STOP or HELP for help.

The Advertisement is not a solicitation or recommendation to buy securities of the advertised company. An offer to buy or sell securities can be made only by a disclosure document that complies with applicable securities laws and only in the states or other jurisdictions in which the security is eligible for sale. The Advertisement is not a disclosure document. The Advertisement is only a favorable snapshot of unverified information about the advertised company. An investor considering purchasing the securities, should always do so only with the assistance of his legal, tax and investment advisors. Investors should review with his or her investment advisor, tax advisor or attorney, if and to the extent available, any information concerning a potential investment at the web sites of the U.S. Securities and Exchange Commission (the "SEC") at www.sec.gov; the Financial Industry Regulatory Authority (the "FINRA") at www.FINRA.org, and relevant State Securities Administrator website and the OTC Markets website at www.otcmarkets.com. The Publisher cautions investors to read the SEC advisory to investors concerning Internet Stock Fraud at www.sec.gov/consumer/cyberfr.htm, as well as related information published by the FINRA on how to invest carefully. Investors are responsible for verifying all information in the Advertisement. As an advertiser, we do not verify any information we publish. The Advertisement should not be considered true or complete.

The Publisher does not offer investment advice or analysis, and the Publisher further urges you to consult your own independent tax, business, financial and investment advisors concerning any investment you make in securities particularly those quoted on the OTC Markets. Investing in securities is highly speculative and carries an extremely high degree of risk. You could lose your entire investment if you invest in any company mentioned in the Advertisement. You acknowledge that we are not an investment advisory service, a broker-dealer or an investment adviser and we are not qualified to act as such. You acknowledge that you will consult with your own independent, tax, financial and/or legal advisers regarding any decisions as to any company mentioned here. We have not determined if the Advertisement is accurate, correct or truthful. The Advertisement is compiled from publicly available information, which include, but are not limited to, no cost online research, magazines, newspapers, reports filed with the SEC or information furnished by way of press releases. Because all information relied upon by us in preparing an advertisement about an issuer comes from a public source, it is not reliable, and you should not assume it is accurate or complete.

By your subscription to our profiles, the viewing of this profile and/or use of our website, you have agreed and acknowledged the terms of our full disclaimer and privacy policy which can be viewed at the following link: www.SmallCapStocks.com/Disclaimer and www.SmallCapStocks.com/Privacy-Policy

By accepting the Advertisement, you agree and acknowledge that any hyperlinks to the website of (1) a client company, (2) the party issuing or preparing the information for the company, or (3) other information contained in the Advertisement is provided only for your reference and convenience. The advertiser is not responsible for the accuracy or reliability of these external sites, nor is it responsible for the content, opinions, products or other materials on external sites or information sources. If you use, act upon or make decisions in reliance on information contained in any disseminated report/release or any hyperlink, you do so at your own risk and agree to hold us, our officers, directors, shareholders, affiliates and agents harmless. You acknowledge that you are not relying on the Publisher, and we are not liable for, any actions taken by you based on any information contained in any disseminated email or hyperlink.