Accel Entertainment\u2019s 15.4% return over the past six months has outpaced the S&P 500 by 10.9%, and its stock price has climbed to $12 per share. This was partly thanks to its solid quarterly results, and the performance may have investors wondering how to approach the situation. <\/p>\n
Is now the time to buy Accel Entertainment, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it\u2019s free<\/a>. <\/p>\n We\u2019re glad investors have benefited from the price increase, but we’re swiping left on Accel Entertainment for now. Here are three reasons you should be careful with ACEL and a stock we’d rather own. <\/p>\n Revenue growth can be broken down into changes in price and volume (for companies like Accel Entertainment, our preferred volume metric is video gaming terminals sold). While both are important, the latter is the most critical to analyze because prices have a ceiling. <\/p>\n Accel Entertainment\u2019s video gaming terminals sold came in at 27,950 in the latest quarter, and over the last two years, averaged 6.5% year-on-year growth. This performance was underwhelming and suggests it might have to lower prices or invest in product improvements to accelerate growth, factors that can hinder near-term profitability. <\/p>\n If you\u2019ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can\u2019t use accounting profits to pay the bills. <\/p>\n Over the next year, analysts predict Accel Entertainment\u2019s cash conversion will slightly improve. Their consensus estimates imply its free cash flow margin of 4.7% for the last 12 months will increase to 5.8%. <\/p>\n A company\u2019s ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity). <\/p>\n We like to invest in businesses with high returns, but the trend<\/em> in a company\u2019s ROIC is what often surprises the market and moves the stock price. Over the last few years, Accel Entertainment\u2019s ROIC averaged 4.8 percentage point decreases each year. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between. <\/p>\n Accel Entertainment falls short of our quality standards. With its shares topping the market in recent months, the stock trades at 12.5\u00d7 forward P\/E (or $12 per share). While this valuation is reasonable, we don\u2019t see a big opportunity at the moment. There are better investments elsewhere. We\u2019d suggest looking at a fast-growing restaurant franchise with an A+ ranch dressing sauce<\/a>. <\/p>\n ONE MORE THING: Top 5 Growth Stocks.<\/strong> The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.<\/p>\n Find out which 5 stocks it’s flagging for this month \u2014 FREE. Get Our Top 5 Growth Stocks for Free HERE<\/strong><\/a>.<\/p>\nWhy Do We Think Accel Entertainment Will Underperform? <\/h2>\n
1. Weak Growth in Video Gaming Terminals Sold Points to Soft Demand<\/h3>\n
2. Projected Free Cash Flow Gains to Pump Profits<\/h3>\n
3. New Investments Fail to Bear Fruit as ROIC Declines<\/h3>\n
![\"Accel](\"https:\/\/news-assets.stockstory.org\/chart-images\/Accel-Entertainment-Trailing-12-Month-Return-On-Invested-Capital_2026-04-20-040106_imgl.png\")
<\/figure>\nFinal Judgment<\/h2>\n
High-Quality Stocks for All Market Conditions<\/h2>\n