Accel Entertainment Inc. (ACEL)

FairStock Score: 61/100 — STEADY

Key Financials

Strengths

• Generates $41 million in annual free cash flow (4.2% yield on market cap)
• Strong Piotroski F-Score of 8/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Solid return on equity of 19.2% above cost of capital

Concerns

• Trades significantly above Graham Number ($7) with negative 83% margin of safety—limited downside protection
• High leverage at 2.25x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 1.6 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Accel Entertainment Inc. is a micro-cap consumer cyclical company valued at $992 million. The business generates $1.3 billion in annual revenue with a 1.2% net margin and $41 million in free cash flow. From a quality standpoint, Accel shows near-perfect Piotroski F-Score of 8/9 indicating exceptional financial health and distressed Altman Z-Score of 1.6 warrants caution. On valuation, the stock is reasonably priced at 20.4x earnings, with trades above its Graham Number with a negative 83% margin. Growth dynamics show revenue growing at 7.5% and profit growth of 93.3%. Our composite FairStock Score of 61/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $41 million in annual free cash flow (4.2% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Elevated leverage at 2.3x D/E means rising interest rates or revenue weakness could strain debt covenants and force asset sales at distressed prices. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer