Wynn Resorts Q3 Earnings: Key Takeaways

by Trefis Team
Wynn Resorts
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Wynn Resorts (NASDAQ: WYNN) reported its Q3 earnings on Thursday, October 26. Wynn reported another strong quarter as its revenues and EBITDA grew by nearly 45% and 54%, respectively. The full quarter of operations of Wynn Palace, which was opened in Q3’16, was the primary growth driver for the company this quarter. The revitalization of VIP gambling in Macau also contributed to Wynn’s strong earnings. However, the key takeaway from Wynn’s Q3 earnings was the strong organic growth of Wynn Macau despite the increased competition in the region. While Las Vegas Sands struggled to match the industry growth in its Q3 earnings, Wynn Macau’s EBITDA grew by nearly 21% this quarter. Another important takeaway from Wynn’s earnings was its strong performance in Las Vegas. We expect Wynn’s strong performance in Macau and Las Vegas to continue in the near term due to its sustainable business model.

Our $151 price estimate for Wynn is slightly ahead of the current market price.

Wynn Beats Competitors in Macau

Wynn has two integrated resorts in Macau, Wynn Macau and Wynn Palace. Wynn Palace started its operations in the later part of Q3’16 and has been a consistent performer since then. Wynn’s overall revenues in the quarter grew by about 45% this quarter and most of the growth came from Wynn Palace. Macau’s gross gaming revenues grew by 22% in the quarter, with increased VIP gaming and new casino openings in the Cotai strip driving much of that growth. However, despite the competition from new casinos in the region, Wynn Macau’s casino revenues also grew by nearly 17% this quarter. Competition in the region is likely to intensify after the opening of MGM’s new casino in Q4’17. However, we believe that Wynn’s revenues and profits will not be impacted significantly by the MGM Cotai opening, as Wynn has generally shown resilient growth in its older casinos despite tough competition.

For our model and valuation, please refer to our complete analysis of Wynn Resorts

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