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.
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 growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and a generally disappointing performance in the stock itself.
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Highlights from the ratings report include:
- WYNN's revenue growth has slightly outpaced the industry average of 3.6%. 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. This trend suggests that the performance of the business is improving. 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).
- 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 8.60% trails the industry average.
- The debt-to-equity ratio is very high at 14.06 and currently higher than the industry average, implying increased risk associated with the 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 2.28, 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 the Hotels, Restaurants & Leisure industry average. The net income has decreased by 11.8% when compared to the same quarter one year ago, dropping from $127.06 million to $112.04 million.
Wynn Resorts, Limited, together with its subsidiaries, engages in the development, ownership, and operation of destination casino resorts. Wynn has a market cap of $10.87 billion and is part of the services sector and leisure industry. The company has a P/E ratio of 20.3, above the S&P 500 P/E ratio of 17.7. Shares are down 2.2% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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