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Scientific Games Secures Contract for 4200 Units of iVIEW4

Zacks

Scientific Games Corporation SGMS has been awarded a contract by Temecula, CA-based Pechanga Resort & Casino to provide 4,200 new iVIEW4 on-device player-interface controllers. These will be installed inside all slot machines at the resort’s casino floor.

The iVIEW4 technology enables casino operators to attract more gamers by providing interactive and personalized gaming experience, instant response through multi-touch display and permitting cardless play. It also supports HTML5 graphics and uses web widgets to help casino marketers update content with ads and videos very smoothly. Moreover, the solution expands games and content memory by 10 times and makes start-up seven times faster.

We believe the popularity of iVIEW4 technology in the market will help to sustain the momentum in Scientific Games’ shares, which have gained 156.5% year to date, substantially outperforming the industry’s12.2% rally.


Increasing Clientele for iVIEW4

In the last reported quarter, almost 60% of Scientific Games’ total revenue was contributed by its gaming segment, which was driven by growth in Gaming Machine sales and Gaming Systems. The year-over-year growth in Gaming Systems revenues was driven by an increase in software and hardware sales, including shipment of new iVIEW4 player-interface display units.

The iVIEW4 technology bodes well for the company as it ensures a steady flow of customers. In March 2017, the company received a contract for 2,800 new iVIEW4 displays from Auburn, WA-based Muckleshoot Casino. Scientific Games’ iVIEW technology is also installed in all the 1,140 slot machines of Bahama-based Baha Mar Casinos.

Contracts from such popular casinos like Pechanga and Muckleshoot indicate increasing adoption of iVIEW4. Per market research firm Technavio, global slot machine market is expected to witness CAGR of 15.49% during the period 2017-2021. We believe the sophisticated and advanced features of iView4 technology will help the company to cash in on the growing global slot machine market and be a key growth driver going ahead.

However, increasing investments for product development are anticipated to weigh on margins.

Zacks Rank & Stocks to Consider

Currently, Scientific Games carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Applied Materials AMAT, Applied Optoelectronics AAOI and Activision Blizzard ATVI, all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Applied Materials, Applied Optoelectronics and Activision is currently projected to be 17.1%, 17.5% and 13.6%, respectively.

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