About a month has gone by since the last earnings report for Wynn Resorts (WYNN - Free Report) . Shares have added about 8.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Wynn Resorts Q3 Earnings Beat on Higher Revenues
Wynn Resorts posted solid results for third-quarter 2017, with earnings and revenues beating the Zacks Consensus Estimate.
Earnings and Revenues Discussion
Adjusted earnings of $1.52 per share surpassed the Zacks Consensus Estimate of $1.37 by nearly 11%. Further, the bottom line increased over 100% from the year-ago figure of 74 cents, given a substantial rise in revenues.
Also, Wynn Resorts’ revenues of $1.61 billion topped the Zacks Consensus Estimate of $1.56 billion by 3.3%. In fact, the top line increased 45.3%, given significant contribution from Wynn Palace along with favorable performance by the company’s Las Vegas Operations and higher revenues from Wynn Macau.
Adjusted property earnings before interests, taxes, depreciation and amortization (EBITDA) surged 54.8% to $473 million year over year on higher revenues.
Wynn Resorts reports its Macau table games results under two segments - VIP and mass market.
Wynn Macau revenues increased 15.3% year over year to $597.4 million in the quarter, owing to higher casino revenues, somewhat offset by lower non-casino revenues.
Notably, casino revenues from Macau operations jumped 16.2% to $567.7 million. Meanwhile, table games turnover in the VIP segment rose 22.2% to $13.37 billion. In addition, the VIP table games win rate (based on turnover) was 3.37%, up 3 basis points (bps) year over year and above the projected range of 2.7% to 3%.
Table drop in the mass market segment was $1.07 billion, down 3.2%. Nevertheless, table games win in the mass market category amounted to $216.4 million, up 5.5%. Also, mass market win rate was 20.2%, up 160 bps.
Non-casino revenues before promotional allowances decreased 2.3% to $62.2 million. Additionally, room revenues declined 7.9% to $24.1 million. Revenue per available room (RevPAR) also fell 6.6% in the quarter to $240 million as average daily rate (ADR) declined 8.9%. Conversely, occupancy rate increased 220 bps to 97.3%.
In the quarter under review, adjusted property EBITDA was $183.2 million, up 21.3% year over year.
On Aug 22, 2016, Wynn Resorts’ chairman of the board and chief executive officer, Steve Wynn, unveiled the Wynn Palace resort in the Cotai area of Macau. Thus, the third quarter of 2017 represents the fourth full quarter of operations for this resort.
Wynn Resorts’ revenues from Wynn Palace were $555.3 million in the quarter, while casino revenues totaled to $514.5 million.
While table games turnover in the VIP segment was $13.69 billion, VIP table games win rate (based on turnover) was 2.99% within the expected range of 2.7-3%.
Markedly, table drop in the mass market segment was $866.6 million. While, table games win in mass market operations amounted to $194.3 million, mass market win rate was 22.4%.
Non-casino revenues, before promotional allowances were $79.4 million. During the quarter, room revenues were $32.9 million. Notably, ADR came in at $219 million, occupancy of 96.1% and REVPAR of $211 million. In the quarter, adjusted property EBITDA stood at $138.2 million.
Las Vegas Operations
Wynn Resorts’ revenues from Las Vegas operations were up 7.6% to $459.6 million on the back of higher casino and non-casino revenues.
Notably, casino revenues from Las Vegas operations increased 13.9% to $174.4 million. Meanwhile, table games win percentage was 26.6%, up 190 bps and above management’s guidance range of 21-25%.
Also, total non-casino revenues, before promotional allowances increased 4.3% to $329.8 million year over year. Room revenues were up 5.3% to $118.1 million. During the quarter, RevPAR grew 5.4% to $273 million on the back of a 140 bps increase in occupancy rate and a 3.8% rise in ADR. Food and beverage revenues increased 6.6% to $154.8 million, as against entertainment, retail and other revenues decline of 3.3% to $57 million. Adjusted property EBITDA was up 17.6% to $151.5 million.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the past month as none of them issued any earnings estimate revisions.
Currently, the stock has a great Growth Score of A, though it is lagging a lot on the momentum front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for growth based on our styles scores.
The stock has a Zacks Rank #1 (Strong Buy). We are looking for an above average return from the stock in the next few months.