Wynn Resorts Ltd. (WYNN) continues to gain in the stronger global economy, recently hitting a new multi-year high at $117.50 as its new Casino in Mauco produces big returns. With a bullish next-year estimate and high industry rank, this Zacks #1 rank stock doesn’t roll the dice on momentum.
Company Description
Wynn Resorts Ltd., with its subsidiaries, develops, owns and operates casino resorts in Las Vegas and China. The company was founded in 2002 and has a market cap of $14 billion.
We got an update on Wynn’s business on Nov 2 when the company reported strong Q3 results in which CEO Steve Wynn said he potentially sees a bottom in Vegas.
Third-Quarter Results
Revenue for the period was up 50% from last year to $1 billion. Although earnings came in two cents short of the consensus estimate, they were up a solid 18% from last year.
The primary driver of the strong quarter was the company’s Macau resort, its new gaming facility in China that saw revenue increase 54% from last year to $671 million. Non-gaming revenue was also strong, up 66% to $77.5 million as retail and restaurant revenue surged.
The company’s domestic operation in Vegas was also up, with sales increasing 3% from last year to $335 million, led by a 16% increase in food and beverage sales to $112 million.
Financial Position
Wynn also has a strong financial profile, with $1 billion in cash and total debt of $3.4 billion.
Estimates
We have saw some decent movement in estimates off the good quarter, with the current year adding 9 cents to $1.69. The next-year estimate is up 20 cents in the same time to $2.39, a bullish 41% growth projection.
In spite of the company’s forward P/E of 46X, it’s PEG ratio (PE/growth) of 1.12X is only marginally above the value benchmark of 1.
2-Year Chart
On the chart, shares have been trending higher for most of the last 2 years, recently surging higher with the market to hit a new multi-year high at $117.50. Look for support from the trend line on any weakness.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the new Zacks Momentum Trader Service.
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