The owner and operator of destination casino resorts is losing customers, as Macau gaming revenue fell worse than expected, analysts said.
"According to the Gaming Inspection and Coordination Bureau (DICJ), Macau gaming revenue fell 23% year-over-year to MOP 28 billion in October, worse than the expected 21% drop," analysts said, adding, "By segment, we estimate VIP may have fallen 33-35% while mass could be flat or even dropped slightly year-over-year."
"We believe the new smoking ban rule has diverted some premium mass players to low margin VIP rooms where smoking is allowed, hurting margin," analysts added.
Separately, TheStreet Ratings team rates WYNN RESORTS LTD as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate WYNN RESORTS LTD (WYNN) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, growth in earnings per share, expanding profit margins and increase in net income. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- WYNN RESORTS LTD has improved earnings per share by 5.0% 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 $7.17 versus $4.81 in the prior year. This year, the market expects an improvement in earnings ($8.27 versus $7.17).
- 40.25% 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 13.97% trails the industry average.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Hotels, Restaurants & Leisure industry average. The net income increased by 5.2% when compared to the same quarter one year prior, going from $182.02 million to $191.41 million.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 9.8%. Since the same quarter one year prior, revenues slightly dropped by 1.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: WYNN Ratings Report