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After Wynn Resorts (WYNN) Earnings, Should You Buy Casino Stocks?
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Shares of Wynn Resorts (WYNN - Free Report) opened more than 4.2% higher and continued climbing Wednesday morning after the company posted first-quarter earnings and revenue beats. With several other major casinos set to report earnings soon, are Wynn’s results a sign that investors should be buying casino stocks right now?
Macau Lifts Wynn
For the first quarter, Wynn Resorts posted earnings of $1.24 per share and revenues of $1.48 billion, surpassing our respective consensus estimates of $0.74 and $1.34 billion. Thanks to a boost from a new marquee property in Macau, Wynn’s revenue figures grew nearly 48% year-over-year (also read: Wynn Resorts Soars After Q1 Earnings and Revenue Beat).
The company’s new Macau resort, the Wynn Palace, marked its second full quarter of operations. The Palace brought in revenues of $475.8 million, with adjusted property EBITDA coming in at $111.9 million. This represented nearly a quarter of the company’s total adjusted property EBITDA of $427.5 million, which was up 42.4% year-over-year.
Wynn’s Las Vegas Operations grew 6% to $412.9 million, while its Wynn Macau resort fell about 3.5% to $587.0 million—most likely due to increased “competition” from the Palace.
The company’s success in Macau underscores the recovery of the gambling hotspot. Revenues in the region have been growing again after a three-year slump caused by the Chinese government’s corruption crackdown, which targeted VIP gamblers. Macau officials said that gambling revenues grew 13% in the first quarter.
Upcoming Reports
Wynn was one of the first major reports in the gaming industry, and a plethora of other casino giants are set to post their first-quarter results soon.
Las Vegas Sands (LVS - Free Report) is up first, reporting after the bell on Wednesday. Our current consensus estimates call for earnings of $0.62 per share and revenues of $3.12 billion. These figures would represent year-over-year growth of 37.1% and 14.7%, respectively.
Sheldon Adelson’s iconic casino brand could benefit from increased Macau activity, as the company’s new Parisian Macau resort opened in August 2016. Currently, Las Vegas Sands is a Zacks Rank #3 (Hold), and with its Earnings ESP of +1.61%, we can feel more confident about its chances of posting a positive surprise.
MGM Resorts (MGM - Free Report) is set to report its financial results on Thursday. The Zacks Consensus Estimate for MGM’s earnings currently stands at $0.26 per share, and our consensus estimate for its first-quarter revenue calls for $2.61 billion in sales.
These figures would represent year-over-year growth of 61.6% and 17.9%, respectively, but investors might be feeling frustrated about the company’s new Macau property, the MGM Cotai, which was recently delayed for the third time. With a Zacks Rank #3 (Hold) and an Earnings ESP of -3.85%, surprise prediction for MGM is difficult.
Casino investors should also be ready for Melco Crown Entertainment’s (MLCO - Free Report) report on May 3. The company gets the majority of its revenue from the Macau region, so it should benefit from the recent recovery there. Our current consensus estimates call for earnings growth of 14.3% on revenue growth of 8.5%, and the stock is currently a Zacks Rank #2 (Buy).
Another impressive casino stock is Boyd Gaming (BYD - Free Report) . This company’s properties are based in North America, which means it won’t feel a Macau boost, but it does currently sport a Zacks Rank #1 (Strong Buy). Look out for its report on May 2.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
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After Wynn Resorts (WYNN) Earnings, Should You Buy Casino Stocks?
Shares of Wynn Resorts (WYNN - Free Report) opened more than 4.2% higher and continued climbing Wednesday morning after the company posted first-quarter earnings and revenue beats. With several other major casinos set to report earnings soon, are Wynn’s results a sign that investors should be buying casino stocks right now?
Macau Lifts Wynn
For the first quarter, Wynn Resorts posted earnings of $1.24 per share and revenues of $1.48 billion, surpassing our respective consensus estimates of $0.74 and $1.34 billion. Thanks to a boost from a new marquee property in Macau, Wynn’s revenue figures grew nearly 48% year-over-year (also read: Wynn Resorts Soars After Q1 Earnings and Revenue Beat).
The company’s new Macau resort, the Wynn Palace, marked its second full quarter of operations. The Palace brought in revenues of $475.8 million, with adjusted property EBITDA coming in at $111.9 million. This represented nearly a quarter of the company’s total adjusted property EBITDA of $427.5 million, which was up 42.4% year-over-year.
Wynn’s Las Vegas Operations grew 6% to $412.9 million, while its Wynn Macau resort fell about 3.5% to $587.0 million—most likely due to increased “competition” from the Palace.
The company’s success in Macau underscores the recovery of the gambling hotspot. Revenues in the region have been growing again after a three-year slump caused by the Chinese government’s corruption crackdown, which targeted VIP gamblers. Macau officials said that gambling revenues grew 13% in the first quarter.
Upcoming Reports
Wynn was one of the first major reports in the gaming industry, and a plethora of other casino giants are set to post their first-quarter results soon.
Las Vegas Sands (LVS - Free Report) is up first, reporting after the bell on Wednesday. Our current consensus estimates call for earnings of $0.62 per share and revenues of $3.12 billion. These figures would represent year-over-year growth of 37.1% and 14.7%, respectively.
Sheldon Adelson’s iconic casino brand could benefit from increased Macau activity, as the company’s new Parisian Macau resort opened in August 2016. Currently, Las Vegas Sands is a Zacks Rank #3 (Hold), and with its Earnings ESP of +1.61%, we can feel more confident about its chances of posting a positive surprise.
MGM Resorts (MGM - Free Report) is set to report its financial results on Thursday. The Zacks Consensus Estimate for MGM’s earnings currently stands at $0.26 per share, and our consensus estimate for its first-quarter revenue calls for $2.61 billion in sales.
These figures would represent year-over-year growth of 61.6% and 17.9%, respectively, but investors might be feeling frustrated about the company’s new Macau property, the MGM Cotai, which was recently delayed for the third time. With a Zacks Rank #3 (Hold) and an Earnings ESP of -3.85%, surprise prediction for MGM is difficult.
Casino investors should also be ready for Melco Crown Entertainment’s (MLCO - Free Report) report on May 3. The company gets the majority of its revenue from the Macau region, so it should benefit from the recent recovery there. Our current consensus estimates call for earnings growth of 14.3% on revenue growth of 8.5%, and the stock is currently a Zacks Rank #2 (Buy).
Another impressive casino stock is Boyd Gaming (BYD - Free Report) . This company’s properties are based in North America, which means it won’t feel a Macau boost, but it does currently sport a Zacks Rank #1 (Strong Buy). Look out for its report on May 2.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Stocks that Aren't in the News. Yet.
You are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. Many of these companies are almost unheard of by the general public and just starting to get noticed by Wall Street. They have been pinpointed by the Zacks system that nearly tripled the market from 1988 through 2015 with a stellar average gain of +26% per year. See these high-potential stocks free >>