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Takeaway: BYI's announcements at G2E next week should be a long-term positive catalyst. Management has a positive outlook for the road ahead.

Bally Technologies (BYI) will likely provide a bullish outlook to investors next week at industry gaming event G2E, backing it up with strong content and new devices. Hedgeye Gaming, Leisure and Lodging Sector Head Todd Jordan has been out in Las Vegas this week meeting with Bally management and discussing all segments of their business.

Management has told us they’re very bullish on not just upcoming content but their outlook for future quarters as well. This is the kind of optimism we like to see at a company. The stock has done well relative to its competitors and is up nearly +25% year-to-date. Right now we’re not making any calls on their September quarter; we’re essentially in-line with expectations and think next week’s G2E announcements could be a positive long-term catalyst.

BYI: King Of Content  - slotsups

Jordan highlights some data points from high trip to Vegas and meeting with BYI below:

“We’re usually sober regarding the pre-G2E commentary and glowing press releases regarding each company’s upcoming G2E exhibits.  What’s different for BYI is that this historically reel spinning slot supplier is going to display mostly video content that has apparently been getting great feedback from customers.  Remember that approximately 80% of units shipped are video and unbeknownst to most investors, BYI’s recent slot shipments have also been around 80% of total.  So their video content is already driving higher share recently and with what they are going to show at G2E, will likely increase their high teens overall share.  This is not your father’s Bally Gaming.”