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Player Avatar NetscribeGames (60.86) Submitted: 12/22/2006 7:54:58 AM : Outperform Start Price: $27.79 SHFL Score: -65.22

Shuffle Master, started in the 80’s at the casino capital of the world, Las Vegas, is one the leading developer and marketer of technology based products for gaming industry. Company’s core product has been the Shufflers where they have established a near monopoly with around 90% market share. Shufflers also contribute close to 50% to the total revenues. It segregates the offering in two major segments: Utility Products and Entertainment Products. Utility Products segments mainly offers range of shufflers contributing half of the revenues, while the other half is provided by Entertainment Products, which offer proprietary table games like black jack and poker.

Shuffle’s recent acquisition of Stargames has resulted in phenomenal performance with quarterly revenue growth inching closer to the 50% mark. Now, in the near future, this trend is expected to continue mainly as around 1,500 tables and massive total of 10,000 slot machines are expected to be established at Las Vegas Sands Casinos at Cotai strip. Further, if we consider expected combined sales of around 1,000 more tables, mainly at Venetian Macau and Far Eastern Consortium in couple of years to come, it seems certain that company will see a bright future.

The company also has exciting pipeline of new products like rapid table games, casino on demand and blackjack press. However, the core product, which will take the growth forward, is the recent introduction of new i-deal shuffler. It’s a third generation shuffler which is twice as fast as the older one. The older version has a market share of close to 40%, and a wave of replacement cycle for this high end and better margin producing product will take Shuffle Master even forward. Additionally, if we consider company’s recent venture with Sona Mobile for wireless gaming, and its re-entry in the booming slots market, we can safely state that Shuffle is all set to embark on a flourishing future.

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Member Avatar thecatsass1 (< 20) Submitted: 5/21/2007 10:44:38 PM
Recs: 1

I have worked at three casino properties over the past 15 years and each one has dumped shuffle master at the end of their contract. Reason, poor service, machines always down, all around a bad deal for the casino.

I expect more will follow as their contracts run out. I would not put a dime in this company!

Member Avatar jonmchan (98.72) Submitted: 7/6/2007 10:43:42 PM
Recs: 0

I would be wary about recommending this company after the Motley Fool's Stock Advisor believes that there is some trouble with the fundamentals of the company.

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