NEW YORK (TheStreet) -- Shares of Las Vegas Sands (LVS - Get Report) are rising by 3.01% to $47.52 on Tuesday morning, as the casino sector gets a boost from the unexpected rise in revenue out of China's Macau gambling district.
Gross gaming revenue in Macau was 9.1 billion patacas for the first 11 days of October, or $1.1 billion, Bloomberg reports. That is roughly 827 million patacas a day, better than the 750 million to 800 million patacas Credit Suisse was anticipating.
Las Vegas Sands is a Las Vegas-based resort and casino company with operations in the U.S. and parts of Asia.
Macau has been struggling with over a yearlong consecutive monthly decline in revenue following the Chinese government's anticorruption crackdown. The government's initiative had been keeping high stakes and VIP players away from Macau's tables.
Macau is still dealing with the impact from the crackdown and casino receipts so far in October suggest a drop in revenue of 25% to 28%, this would be Macau's smallest decline in nine months, Bloomberg noted.
Separately, TheStreet Ratings team rates LAS VEGAS SANDS CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
We rate LAS VEGAS SANDS CORP (LVS) a BUY. This is driven by some important positives, 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 expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 46.52% is the gross profit margin for LAS VEGAS SANDS CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.05% is above that of the industry average.
- LVS, with its decline in revenue, underperformed when compared the industry average of 3.5%. Since the same quarter one year prior, revenues fell by 19.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, LAS VEGAS SANDS CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- LAS VEGAS SANDS CORP's earnings per share declined by 28.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, LAS VEGAS SANDS CORP increased its bottom line by earning $3.51 versus $2.79 in the prior year. For the next year, the market is expecting a contraction of 26.5% in earnings ($2.58 versus $3.51).
- The debt-to-equity ratio of 1.39 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, LVS has managed to keep a strong quick ratio of 1.55, which demonstrates the ability to cover short-term cash needs.
- You can view the full analysis from the report here: LVS