Published on: August 27, 2025, 07:19h.
Updated on: August 27, 2025, 07:19h.
- Analyst Highlights Accel Entertainment as an Undervalued Gaming Stock
- Company operates in distributed gaming, offering shares at competitive prices compared to industry peers
Within the realm of gaming stocks, Accel Entertainment (NYSE: ACEL) remains relatively obscure. This lack of visibility may stem from its specialized market sector and a market cap of $967.69 million. However, one analyst identifies promising potential in its shares.
In a recent client report, Texas Capital analyst David Bain commenced coverage of Accel, assigning a “buy” rating alongside a price target of $17 for the gaming supplier. This target suggests a potential upside of 47.1% from the current closing price.
Bain states, “We consider ACEL to be an underfollowed and undervalued gaming entity that combines solid free cash flow generation with growth, all while being attractively priced.” He adds, “ACEL’s hyper-local operations, which are largely variable-cost driven, make it more resilient in an economic downturn compared to most regional casinos. Additionally, its projected sales and EBITDA growth rates exceed the industry average.”
Bain’s observation about Accel’s lack of attention in the investment world is compelling. He is among the few sell-side analysts covering the stock. Historically, smaller, less-followed stocks have seen substantial returns.
Accel Entertainment Stock: A Growth Narrative
Accel’s operational model is straightforward. The company distributes Video Gaming Terminals (VGTs) to venues including restaurants, bars, taverns, convenience stores, liquor stores, truck stops, and grocery retailers. Although this may not seem glamorous, it certainly does not detract from the company’s growth prospects.
Accel is already demonstrating its growth trajectory. In 2019, the firm was active in just one state. Now, it’s expanded to six states, and as Bain highlights, the company boasts 27,388 VGTs across 4,427 locations by the end of Q2. This number surpasses that of Red Rock Resorts (NASDAQ: RRR) and is only slightly behind Boyd Gaming, both of which are regional casino operators.
What Accel may lack in glamour akin to iGaming or online sports betting, it compensates with a reliable model that could ensure long-term stability and transparency—traits that investors often seek.
Bain elaborates, “The growth of distributed gaming is consistent in mature markets, while emerging markets present notable growth opportunities.” He concludes that the nature of distributed gaming—hyper-local and variable-cost—renders it more resistant than regional casinos during potential economic downturns. Furthermore, distributed gaming provides unique opportunities for geographic expansion that outstrip traditional brick-and-mortar casinos. ACEL is uniquely positioned to profitably penetrate new markets, presenting substantial unaccounted forecasted upside.”
Accel Entertainment Stock: An Attractive Valuation
Although Accel showcases an evident growth trajectory, it is not overly ambitious in terms of valuation. Bain notes that the company’s projected enterprise value/EBITDA for 2025 and 2026 is discounted by 51% and 54%, respectively, compared to the broader gaming supplier market.
In addition, Accel’s anticipated free cash flow yields for 2025 and 2026 are, on average, 28% lower than those of the regional casino sector, despite the supplier’s expected sales growth outpacing that of regional gaming venues.
Bain concludes, “We believe ACEL presents a clear path for revenue, EBITDA, and free cash flow growth that is superior to its peers, along with additional, unmeasured potential for upside.” In contrast, the stock valuation remains significantly below that of its competitors.