Intrinsic Value Evergreen Gaming Corporation (TNA.V)

• Previous Close: $0.86
• Intrinsic Value: n/a
• Upside potential: n/a%

Stock Valuation Context

Business Model And Market Position

Evergreen Gaming Corporation operates as a regional gaming company focused on casino operations in Washington state. The company generates revenue primarily through its four casino properties: The Riverside in Tukwila, Goldies Casino in Shoreline, and Chips and Palace casinos in Lakewood. Its core business model centers on operating gaming floors featuring various card games including Poker, Blackjack, Spanish 21, and Baccarat, complemented by pull tabs and ancillary food and beverage services through on-site bars and restaurants. Operating in the highly regulated Washington gaming market, Evergreen occupies a niche position serving local communities rather than pursuing large-scale resort development. The company's market positioning relies on convenient local access for recreational gamblers, distinguishing itself from destination casino resorts through its neighborhood-focused approach. This strategy allows Evergreen to maintain lower operational overhead while cultivating loyal customer bases within specific geographic markets. The regional casino sector demands careful navigation of state-specific regulations and competitive dynamics, particularly given Washington's unique gaming landscape that includes tribal casino dominance. Evergreen's multi-property portfolio provides some operational diversification while maintaining a concentrated regional focus within the Pacific Northwest gaming market.

Revenue Profitability And Efficiency

For FY 2021, Evergreen Gaming reported revenue of CAD 45.4 million with net income of CAD 6.7 million, translating to a healthy net margin of approximately 14.7%. The company demonstrated solid operational efficiency with operating cash flow of CAD 8.9 million significantly exceeding capital expenditures of CAD 0.9 million. This cash flow generation indicates effective management of gaming operations and ancillary services across its casino portfolio.

Earnings Power And Capital Efficiency

The company exhibited strong earnings power with diluted EPS of CAD 0.054 per share based on 123.8 million shares outstanding. Operating cash flow coverage of capital expenditures was robust at nearly 10 times, suggesting efficient reinvestment requirements. The positive net income and substantial operating cash flow generation reflect the cash-generative nature of the regional casino business model.

Balance Sheet And Financial Health

Evergreen maintained a conservative financial position with CAD 25.1 million in cash and equivalents against total debt of CAD 11.4 million, resulting in a net cash position. This strong liquidity profile provides significant financial flexibility and indicates low leverage risk. The substantial cash reserves relative to debt obligations suggest a well-capitalized balance sheet capable of weathering operational challenges.

Growth Trends And Dividend Policy

The company does not currently pay dividends, retaining earnings to support operations and potential growth initiatives. The capital expenditure level of CAD 0.9 million suggests modest reinvestment in existing properties rather than aggressive expansion. Historical growth patterns would require additional context from prior periods to assess trajectory, though the FY 2021 results indicate stable operations.

Valuation And Market Expectations

With a reported market capitalization of zero, the company appears to be either privately valued or potentially delisted. The absence of beta data suggests limited trading activity or analyst coverage. Valuation metrics cannot be reliably calculated without current market pricing, indicating potential challenges in market recognition or liquidity.

Strategic Advantages And Outlook

Evergreen's strategic advantages include its established presence in Washington's local gaming markets and diversified property portfolio. The outlook remains dependent on regional economic conditions and regulatory environment. The company's strong cash position provides operational stability, though market valuation challenges may indicate limited growth expectations or investor interest in the current micro-cap gaming segment.

Sources

Company financial statementsTSXV filings