Yahoo Finance Why Is Wynn (WYNN) Down 2.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Wynn Resorts (WYNN). Shares have lost about 2.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Wynn due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Wynn Resorts Q1 Earnings & Revenues Beat Estimates
Wynn Resorts reported impressive first-quarter 2024 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Also, the top and the bottom line rose year over year.
During the quarter, the company reported strong performance in non-gaming businesses, with 16% year-on-year revenue growth, primarily driven by a 21% increase in hotel revenues alongside healthy casino volumes. In Las Vegas, WYNN’s emphasis on superior service, continuous property reinvestment and exclusive programming sustained growth. It stated that the positive momentum extended into April, with healthy year-over-year growth in Drop, Handle and RevPAR.
Q1 Earnings & Revenues
During the quarter, the company reported adjusted earnings per share (EPS) of $1.59, beating the Zacks Consensus Estimate of $1.43 by 11.2%. In the prior-year quarter, the company reported an adjusted EPS of 29 cents.
Quarterly revenues of $1.86 billion surpassed the consensus mark of $1.77 billion by 5.1%. Also, the top line increased 30.9% on a year-over-year basis. Solid contributions from Macau and Las Vegas Operations backed the upside.
Wynn Palace Operations
During the first quarter of 2024, Wynn Palace’s operating revenues were $586.9 million compared with $369.4 million reported in the prior-year quarter. Our model predicted segmental revenues at $472.7 million.
Casino revenues in the reported quarter totaled $473.8 million compared with $270.7 million reported in the prior-year quarter. Rooms and food and beverage revenues 15% and 36.2% year over year to $53.9 million and $32 million, respectively. During the quarter under review, entertainment, retail and other revenues fell 3.9% year over year to $27.1 million.
In the VIP segment, table games turnover was $3.92 billion, up 71% year over year. VIP table games win (loss) rate (based on turnover) was 3.30% compared with 2.72% reported in the prior-year quarter. Table drop in the mass market segment was $1.78 billion compared with $1.18 billion reported in the prior-year quarter. Table game wins in mass market operations amounted to $437.3 million compared with $260.9 million reported in the prior-year quarter.
During the reported quarter, revenue per available room (or RevPAR) increased 18.1% year over year to $333. Occupancy levels in the segment were 98.8% compared with 88.1% reported in the prior-year quarter. The average daily rate (ADR) during the quarter was $337, up 5% on a year-over-year basis.
Wynn Macau Operations
During the first quarter, Wynn Macau’s operating revenues amounted to $411.7 million compared with $230.7 million reported in the prior-year quarter. For this business operation, we projected year-over-year growth of 44.5% to $333.3 million.
Casino revenues in the reported quarter were $346.4 million, up 96.4% year over year. Revenues from rooms and food and beverage surged 30.3% and 47% year over year to $28.6 million and $21 million, respectively. Entertainment and retail and other revenues declined 12.8% year over year to $15.8 million.
Table games turnover in the VIP segment increased 38.9% year over year to $1.59 billion. The VIP table games win rate (based on turnover) was 3.39%, up from 2.69% reported in the prior-year quarter.
Table drop in the mass market segment was $1.68 billion compared with $989.9 million reported in the prior-year quarter. Table games win in the mass market category was $326.3 million compared with $168.4 million reported in the prior-year quarter.
During the reported quarter, RevPAR grew 28.2% year over year to $282. Occupancy levels in the segment were 99.4% compared with 90.9% in the prior-year quarter. ADR was $284, up 17.4% year over year.
Las Vegas Operations
During the first quarter, operating revenues from Las Vegas operations were $636.5 million compared with $586.8 million reported in the prior-year quarter. Our projection for the metric was $626.7 million.
Casino revenues declined 12.5% year over year to $135.2 million. Revenues from food and beverage grew 12.2% to $193.6 million. Revenues for rooms and entertainment, retail and other increased by 21.1% and 12.1% year over year to $224.1 million and $83.7 million, respectively.
Table games drop was up 0.6% year over year to $604.2 million. Table game wins also increased 7.3% year over year to $156.6 million. During the first quarter, table games win percentage of 25.9% was above 24.3% reported in the prior-year quarter.
During the quarter under review, RevPAR rose 19.6% year over year to $524. The occupancy rate was 88%, down from 88.8% reported in the prior-year period. ADR was $595, up 20.7% year over year.
Encore Boston Harbor
During the first quarter, operating revenues from Encore Boston Harbor operations amounted to $217.8 million compared with $216.3 million reported in the prior-year quarter. Our projection for the metric was $221.5 million.
Casino revenues inched up 0.5% year over year to $166.2 million. Revenues from rooms increased 12.1% year over year to $20.8 million. Revenues from food and beverage declined 9.1% year over year to $20.2 million. Entertainment, retail and other revenues increased 4.9% year over year to $10.6 million.
During the quarter, table games win percentage of 22.6% was above 21.7% reported in the prior-year quarter.
During the reported quarter, RevPAR increased 10.7% year over year to $342. The occupancy rate was 89.7%, down from 90% reported in the prior-year quarter. ADR was $381, up 11.1% year over year.
Operating Performance
During the first quarter of 2024, adjusted property EBITDAR was $646.5 million compared with $429.7 million reported in the prior-year quarter.
In the quarter under review, adjusted property EBITDAR from total Macau totaled $339.6 million compared with $155.8 million reported in the prior-year quarter. Adjusted property EBITDAR from Las Vegas operations was $246.3 million compared with $231.6 million reported in the year-ago quarter. Adjusted property EBITDAR from Encore Boston Harbor was $63.1 million compared with $63.4 million reported in the prior-year quarter.
Cash Position
As of Mar 31, 2024, Wynn Resorts’ cash and cash equivalents totaled $2.42 billion compared with $2.88 billion reported as of Dec 31, 2023.
Total current and outstanding debt at the end of first-quarter 2024 amounted to $11.21 billion. The figure included $1.45 billion of Wynn Las Vegas-related debt, $6.61 billion of Macau debt, $2.53 billion of Wynn Resorts Finance debt and $614.2 million of debt held by the retail joint venture, which the company consolidated.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
Currently, Wynn has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Wynn has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Wynn is part of the Zacks Gaming industry. Over the past month, MGM Resorts (MGM), a stock from the same industry, has gained 0.9%. The company reported its results for the quarter ended March 2024 more than a month ago.
MGM reported revenues of $4.38 billion in the last reported quarter, representing a year-over-year change of +13.2%. EPS of $0.74 for the same period compares with $0.44 a year ago.
MGM is expected to post earnings of $0.68 per share for the current quarter, representing a year-over-year change of +15.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for MGM. Also, the stock has a VGM Score of A.
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