Caesars Entertainment (CZR) Fell Over 25% in Q1

JDP Capital Management, an investment management company, released its “Survivor & Thriver Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The uncertainty surrounding the impact of tariffs on corporate earnings has led to significant volatility in individual stocks in the first quarter. In this environment, the fund was down 2% net to investors compared to a -4.2% return for the S&P 500, including dividends. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its first-quarter 2025 investor letter, JDP Capital Management highlighted stocks such as Caesars Entertainment, Inc. (NASDAQ:CZR). Caesars Entertainment, Inc. (NASDAQ:CZR) is a gaming and hospitality company. The one-month return of Caesars Entertainment, Inc. (NASDAQ:CZR) was -1.07%, and its shares lost 29.76% of their value over the last 52 weeks. On April 23, 2025, Caesars Entertainment, Inc. (NASDAQ:CZR) stock closed at $26.72 per share with a market capitalization of $5.66 billion.

JDP Capital Management stated the following regarding Caesars Entertainment, Inc. (NASDAQ:CZR) in its Q1 2025 investor letter:

"Caesars Entertainment, Inc. (NASDAQ:CZR) - In terms of upside it is not hard to see $80 or $90 per share for CZR in present value using a simple breakup value analysis (200% to 300%+ upside) from today's $25 price. Although Vegas and regional brick and mortar casino revenue declined by 1% in 2024, we are invested in CZR for the unrecognized earnings power of the high margin, high return on capital online gaming business. As the largest and arguably most investor-friendly gaming and hotel business in the US, CZR is benefiting from state-by-state legalization of online gaming. In 2024 CZR's online gaming business (Caesars Palace and Horseshoe Apps) grew 20% to 1.2 billion with EBITDA up 207% to $117 million over 2023. In 4Q 2024, iGaming revenue grew 65% on top of 54% growth in 2023. Helping to fuel 2025 online gaming growth, Caesars is launching a live, iCasino in-app product in Michigan and New Jersey following legalization in those states. CEO Tom Reeg is confident that the online gaming business is on track to achieve $500 million in EBITDA as planned. Once achieved, the online business would be worth well in excess of the entire company current market cap of $5 billion. Setting aside this potential, CZR should earn over $1 billion in after-tax free cash flow in 2025 implying a 20%+ equity yield on the stock today. Caesars recently expanded its board to include two Carl Ichan-appointed members. The stock was down over 25% in the first quarter."

Caesars Entertainment, Inc. (NASDAQ:CZR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 79 hedge fund portfolios held Caesars Entertainment, Inc. (NASDAQ:CZR) at the end of the fourth quarter compared to 67 in the third quarter. While we acknowledge the potential of Caesars Entertainment, Inc. (NASDAQ:CZR) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we covered Caesars Entertainment, Inc. (NASDAQ:CZR) and shared the list of most promising long-term stocks according to analysts. JDP Capital Management shared optimism about Caesars Entertainment, Inc.'s (NASDAQ:CZR) prospects for 2025 in its Q4 2024 investor letter. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.