Long-Term Trends In Favor Of Wynn Resorts Stock

WYNN: Wynn Resorts logo
Wynn Resorts

In recent earnings, Wynn Resorts (NASDAQ: WYNN) highlighted the strong recovery in Las Vegas and Boston over the last couple of months. Rising discretionary spending and revenge tourism have been key drivers of Wynn’s casino revenues in Las Vegas and Boston. Notably, the Wynn Las Vegas’ second quarter table games wagers almost reached Q2 2019 levels, resulting in comparable revenues and EBITDA. While the re-imposition of stringent pandemic control measures in Macau is a near-term headwind for the stock, long-term growth in mass-market gaming and rising tourist visitations from China are likely to assist revenues and earnings. Considering the long-term trends in revenues and earnings as incorporated in our detailed financial model, Trefis believes that Wynn stock is a good opportunity for long-term gains as highlighted in our interactive dashboard analysis, Wynn Resorts Valuation.

Financial and operating performance in Q2 2021

In Q2 2019, Wynn Resorts’ revenues observed a 36% sequential improvement assisted by growth in Las Vegas and Boston. The company’s Macau operations continued to post weak numbers as entry restrictions limited tourist visitation and casino play. Thus, EBITDA numbers of Las Vegas and Boston reported significant growth while Macau’s figures remained relatively level. The company is targeting $150 million of operational cost savings in the U.S. this year. Interestingly, Wynn reported just $1 billion operating cash burn last year – significantly lower than the $4 billion loss in market capitalization from pre-pandemic levels. Room occupancy rates improved in Las Vegas and Boston pushing casino wagers and food & beverage sales.

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Restriction measures across geographies

With the rising coronavirus cases in the U.S., officials are keen on restricting travel to limit spread and save lives. Thus, investors fear an extended slump for the sector leading to a downside in airline and hotel stocks. Currently, the CDC has not issued any domestic travel advisory, but the daily Covid cases have crossed the 100k mark. Similarly, the Delta variant is leading to a fresh surge in coronavirus cases in China. Per reports, nearly 10 provinces have registered a rise in the past two weeks. Tourists from Mainland China are key to Macau’s gaming industry and stricter restrictions since July have been a headwind for the gaming hub.

Is Wynn Resorts a better pick over its peers? Wynn Resorts Stock Comparison With Peers summarizes how Wynn Resorts compares against peers on metrics that matter. You can find more such useful comparisons on Peer Comparisons.

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