Published on: December 5, 2025, 12:19h.
Updated on: December 5, 2025, 12:19h.
- Analyst begins coverage of the distributed gaming firm with optimistic outlook
- Target price indicates potential growth exceeding 20%
- Analyst suggests shares are undervalued
Accel Entertainment (NYSE: ACEL), a distributed gaming enterprise, has seen a slight decline in its stock this year. However, at least one analyst believes that the stock represents an undervalued opportunity packed with potential.
In a recent report, Citizens analyst Jordan Bender started his coverage of Accel with a “market outperform” rating and set a $13 price target, indicating nearly a 24% upside from current prices. Bender emphasizes that the stock is trading at deep discounts relative to 2027 forecasts and its historical averages, suggesting that investors are undervaluing several key aspects of the company.
The disparity with regional gaming and suppliers indicates that investors are hesitant to acknowledge factors such as: 1) a top-tier balance sheet supported by reliable cash flows; 2) potential returns from a casino at Fairmount Park (aiming for a 20% return); 3) valuation of the VGTs in Chicago (~$5-6 per share) amid budget challenges; or 4) expanding legalized gaming opportunities,” notes Bender.
Discussion surrounding Accel’s influence in Chicago and the broader Illinois market is crucial, as the company operates primarily in this area and it is expected to account for nearly 75% of sales this year.
Accel Boasts a Robust Balance Sheet and Loyal Clientele
Accel’s operational model is straightforward. It distributes video gaming terminals (VGTs) across venues such as restaurants, bars, taverns, convenience stores, liquor shops, truck stops, and grocery outlets. While this may not seem highly attractive within the broader gaming sector, it offers distinct advantages.
The typical customer for Accel is aged 55 or older, many of whom are retirees receiving pensions or Social Security, thus not reliant on job income for discretionary expenditures. Bender highlights that these customers generally reside within a 15-minute radius of a location hosting Accel machines, establishing one of the most engaged and localized customer bases in the gaming industry.
Accel’s financial standing is among the strongest in the distributed gaming sector, with projections of $1.36 in free cash flow per share for the coming year.
“Overall, Accel has ample capacity to continue its stock buyback program, construct the Fairmount casino (targeted for 2028), and pursue mergers and acquisitions, where it has historically been very active over the past decade in terms of deal volume,” asserts Bender.
On the Topic of M&A…
Accel has a well-documented history of acquisitions and recently expanded this narrative with the announcement of acquiring the route operation assets of Dynasty Games. This strategic move enables Accel to bolster its presence in Northern Nevada.
The company’s acquisition strategies and their execution are vital, particularly as growth in Illinois, its largest market, begins to slow.
“Management is actively diversifying its geographic and revenue footprints into other states such as Montana, Nevada, Nebraska, Louisiana, and Georgia. Currently, the organization operates around 28,000 slot machines across these regions, making it the fourth largest slot operator in the United States,” concludes Bender.