Wynn Resorts Struggles While Analysts Remain Bullish
Wynn Resorts, Limited (WYNN), stands out in the luxury hospitality and casino industry, but its recent stock performance has raised eyebrows. Founded in 2002 and based in Las Vegas, Nevada, WYNN currently boasts a market cap of $9.7 billion and aims to deliver unique experiences that elevate luxury entertainment.
Market Performance Highlights
Wynn Resorts’ shares have seen a noticeable decline, currently trading 19.7% below their 52-week high of $110.38, which was reached on April 4. The stock has dropped 9.2% over the last three months, notably lagging behind the S&P 500 Index ($SPX), which enjoyed gains of 4.1% in the same period.
Over the past six months, WYNN has faced a slight downturn, not keeping pace with the SPX’s 8.9% growth. When viewed over the past year, WYNN’s decline of 2.2% contrasts sharply with the SPX’s impressive 24.8% rise, highlighting a challenging year for the company.
The stock’s performance reflects a bearish trend, remaining below its 50-day and 200-day moving averages since early November.
Recent Developments
On November 29, shares of WYNN rose by over 2% after China relaxed visa regulations for Shenzhen and Zhuhai residents, which positively impacted casino stocks with operations in Macau. However, this came on the heels of a 9.3% drop in share price following disappointing Q3 earnings released on November 4.
The company reported $1.69 billion in revenue, marking a modest 1.3% increase year-over-year but falling short by 2% of analysts’ forecasts. Adjusted earnings per share (EPS) stood at $0.90, below expectations of $1.10. Additionally, EBITDA was reported at $290.8 million, missing the target of $552.9 million by 47.4%.
Financial Metrics and Industry Comparison
Performance metrics showed mixed results. Gross margin sharply declined to 42.3% from 67.5% a year ago, while operating margin improved to 7.9% from 3.7%. Nevertheless, EBITDA margin contracted to 17.2% from 26.5% during the same period last year.
In comparison, rival Las Vegas Sands Corp. (LVS) has outpaced WYNN, with its stock rising 6.8% over the past year.
Analysts’ Outlook
Despite its recent underperformance, analysts maintain a positive outlook on Wynn Resorts. Among the 15 analysts who track the stock, the consensus rating stands at “Strong Buy.” Analysts project a mean price target of $114.69, suggesting a potential upside of 29.3% from its current stock price.
On the date of publication,
Rashmi Kumari
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy
here.
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