Las Vegas Sands

Company Description

Las Vegas Sands Corp. is a hotel, gaming, and retail mall company headquartered in Las Vegas, Nevada. The company owns The Venetian Resort Hotel Casino, the Sands Expo and Convention Center, Venetian Interactive, an internet based venture, and Venetian Macao Limited, a developer of multiple casino hotel resort properties in The People's Republic of China's Special Administrative Region of Macao.

Las Vegas Sands Meets or Beats in Four Straight Quarters

Las Vegas Sands has met or topped earnings estimates in four straight quarters. Over the course of the last four quarters, the company has topped the Zacks Consensus Estimate by an average of $0.05 or almost 10.8%. The stock moved higher following each of the reports, including a large move following the September 2011 quarter.

In the September 2011 quarter, the stock rose 10.7% following a 3.7% beat of the bottome line. The company reported earnings of $0.55, $0.02 better than the Zacks Consensus Estimate and were 61% higher than year ago levels. Revenues of $2.4 billion were slightly ahead of the Zacks Consensus Estimate and showed an increase of 26% from the year ago period.

Las Vegas Sands Most Recent Reported Earnings

On April 25, 2012 the company reported revenue of $2.7 billion, roughly $194 million ahead of the Zacks Consensus Estimate and up from $2.1 billion reported in year ago quarter. In addition, earnings per share came in at $0.70, $0.10 higher than the Zacks Consensus Estimate of $0.60. The beat of 16.6% was the largest beat since the June 2011 quarter when the Las Vegas Sands beat by 22%. The stock moved higher following the March 2011 earnings release by 1%.

Las Vegas Sands Sees Earnings Estimates Increase

Following the most recent earnings release, Las Vegas Sands has seen its earnings estimates move higher. In March 2012 the Zacks Consensus Estimate was calling for 2012 earnings of $2.56. Following the most recent beat of $0.10, estimates for the year moved higher by $0.14 to $2.70. The Zacks Consensus Estimate for 2013 also moved higher to $3.19 from $3.09 over the same time period.

Valuations

The valuation picture for Las Vegas Sands is pretty much in line with the industry average in terms of price to earnings. The trailing twelve month PE multiple of 24x is right in line with the industry average. The forward PE multiple of 21x is slightly below the industry average of 23x. The price to book, a more conservative measure, shows LVS trading at 4.4x while the industry avergae is a more reasonable 1.6x. Price to sales sees a similar premium of 4x compared to teh 1.5x industry average.

The Chart

The price and consensus chart shows earnings estimates moving higher for 2012 and 2013. The stock, however, is trailing well behind the growth in earnings. This is generally an indication that the stock is undervalued. Given the inline valuation in terms of price to earnings, it would not be surprising to see Las Vegas Sands expand its multiple to catch up to the growth in earnings estimates. Las Vegas Sandsis Zacks #1 Rank (Strong Buy).

Brian Bolan is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Home Run Investor service You can follow him at twitter.com/bbolan1