NEW YORK (
-- Wynn Resorts
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally poor debt management and a generally disappointing performance in the stock itself.
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Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.6%. Since the same quarter one year prior, revenues slightly increased by 4.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- 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 $338.49 million or 4.73% when compared to the same quarter last year. Despite an increase in cash flow, WYNN RESORTS LTD's average is still marginally south of the industry average growth rate of 8.36%.
- The debt-to-equity ratio is very high at 22.10 and currently higher than the industry average, implying that there is very poor management of debt levels within the company. Regardless of the company's weak debt-to-equity ratio, WYNN has managed to keep a strong quick ratio of 1.64, which demonstrates the ability to cover short-term cash needs.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Hotels, Restaurants & Leisure industry average. The net income has decreased by 19.1% when compared to the same quarter one year ago, dropping from $173.80 million to $140.56 million.
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 21.8, below the average leisure industry P/E ratio of 22.2and above the S&P 500 P/E ratio of 17.7. Wynn has a market cap of $10.54 billion and is part of the
industry. Shares are down 7.6% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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.