Rating Change #1
Wynn Resorts Ltd
(WYNN - Get Report)
has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, growth in earnings per share, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- WYNN's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 0.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- WYNN RESORTS LTD has improved earnings per share by 9.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, WYNN RESORTS LTD increased its bottom line by earning $4.89 versus $1.28 in the prior year. This year, the market expects an improvement in earnings ($5.46 versus $4.89).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, WYNN RESORTS LTD's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has slightly increased to $328.41 million or 3.25% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.58%.
- 37.40% is the gross profit margin for WYNN RESORTS LTD which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 8.62% trails the industry average.
Wynn Resorts, Limited, together with its subsidiaries, engages in the development, ownership, and operation of destination casino resorts. The company has a P/E ratio of 21.4, above the S&P 500 P/E ratio of 17.7. Wynn has a market cap of $11.44 billion and is part of the services sector and leisure industry. Shares are up 3% year to date as of the close of trading on Tuesday.
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-- Reported by Kevin Baker in Palm Beach Gardens, Fla.
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Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.