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Gambling Stock Roundup: WYNN, LVS & Other Q3 Releases in Focus

Last week was a big one for the gambling industry as major casino operators came up with their third-quarter 2017 earnings results.

Among the most notable players were the likes of Wynn Resorts Ltd. WYNN and Las Vegas Sands Corp. LVS that reported better-than-expected results. Meanwhile, Penn National Gaming, Inc. PENN and Monarch Casino & Resort, Inc. MCRI also posted solid Q3 results.

However, Boyd Gaming Corporation’s BYD results were a mixed bag as though earnings missed the Zacks Consensus Estimate, revenues surpassed the same.

Recap of the Week’s Most Important Stories  

1.    Wynn Resorts posted earnings of $1.52 per share in the third quarter, beating the Zacks Consensus Estimate of $1.37 by nearly 11%. Further, this Zacks Rank #1 (Strong Buy) company’s earnings increased over 100% from the year-ago figure of 74 cents mainly on higher revenues. You can see the complete list of today’s Zacks #1 Rank stocks here.

Net revenue of $1.61 billion surpassed the Zacks Consensus Estimate of $1.56 billion by 3.3%. Moreover, the top line increased 45.3% on significant contributions from Wynn Palace along with favorable performance by the company’s Las Vegas Operations and higher revenues from Wynn Macau.

Adjusted property earnings before interests, taxes, depreciation and amortization (EBITDA) surged 54.8% year over year to $473 million on higher revenues (read more: Wynn Resorts Q3 Earnings Beat on Higher Revenues).

2.    Las Vegas Sands’ third-quarter earnings of 77 cents topped the Zacks Consensus Estimate of 67 cents by 14.9% and increased 8.5% year over year backed by higher revenues. Per management, this solid performance was primarily owing to a full quarter of operations for The Parisian Macao and stronger results at Marina Bay Sands in Singapore.

Quarterly net revenue of $3.2 billion also surpassed the consensus mark by nearly 3% and increased 7.7% year over year. On a consolidated basis, adjusted property EBITDA increased 6% year over year to $1.21 billion during the quarter, owing to higher revenues (read more: Las Vegas Sands Q3 Earnings Top on Solid Revenue Growth).

This Zacks Rank #2 (Buy) company also stated that Sands China’s mass and VIP gaming volumes outpaced the overall Macao market growth. Per the company, this strong gaming performance along with higher hotel occupancy and retail mall revenues in the third quarter drove its adjusted property EBITDA in Macao to $652 million, which is the best quarterly performance since fourth-quarter 2014.

3.    Penn National Gaming’s third-quarter adjusted earnings of 27 cents per share topped the Zacks Consensus Estimate of 23 cents by 17.4% However, the bottom line decreased over 47% on a year-over-year basis.

This Zacks Rank #2 company’s net revenues of $806.2 million surpassed the consensus mark by over 1%. Moreover, the top line increased 5.3% year over year driven by better gaming revenues, improved food, beverage, hotel and other revenues as well as higher management service and licensing fees. Adjusted Property EBITDA was $221.8 million in the third quarter, up 5% year over year.

4.    Monarch Casino & Resort’s third-quarter earnings of 49 cents per share beat the Zacks Consensus Estimate of 45 cents by 8.9% Also, earnings increased year over year on the back of higher revenues.

Net revenue of $63 million surpassed the consensus mark by nearly 5%. Moreover, the top line improved 10.4% year over year reflecting solid growth at both Atlantis and Monarch Casino Black Hawk casinos. This Zacks Rank #2 company witnessed an increase in hotel as well as food and beverage and other revenues as well. The strength of the Reno market further drove the results. Meanwhile, adjusted EBITDA stood at $17.5 million, up 7.4% year over year.

5.    Boyd Gaming posted third-quarter adjusted earnings of 22 cents per share, which lagged the Zacks Consensus Estimate of 23 cents by 4.2%. However, earnings increased 57.1% on a year-over-year basis.

Meanwhile, net revenue of $587.7 million was slightly above the consensus mark and rose 10.5% year over year. An increase in gaming, room and other revenues drove this Zacks Rank #3 (Hold) company’s top line, partly offset by decline in food and beverage revenues. Total adjusted EBITDA was $140.3 million, up 15% year over year.

Price Performance

The following table shows the price movement of the major gambling stocks over the past week and the last six months:

Company

Last Week

Last 6 Months

WYNN

-1.1%

12.7%

LVS

-2.2%

4%

MGM

1.2%

0.9%

MLCO

-2.1%

3.7%

MCRI

8.4%

47.7%

PENN

2%

39.2%

BYD

2.3%

27.5%

Over the last five trading sessions, share price movement of the major gambling stocks witnessed a mixed trend. While Monarch Casino gained the maximum at 8.4% followed by Boyd gaming’s rise of 2.3%, Las Vegas Sands and Melco Resorts & Entertainment Limited MLCO recorded a decline of 2.2% and 2.1%, respectively.

However, over the last six months, the price performance of gambling stocks was positive. Among the stocks that appreciated the most were Monarch Casino and Pann National Gaming that rallied 47.7% and 39.2%, respectively. Boyd gaming also recorded a gain of 27.5% over the same time frame.

What’s Next in the Gambling Space?

We note that gambling stocks have oscillated between gains and losses in recent sessions and with the earnings season in full swing, investors can expect this volatility to continue in the coming days.

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Las Vegas Sands Corp. (LVS): Free Stock Analysis Report
 
Wynn Resorts, Limited (WYNN): Free Stock Analysis Report
 
Boyd Gaming Corporation (BYD): Free Stock Analysis Report
 
Monarch Casino & Resort, Inc. (MCRI): Free Stock Analysis Report
 
Penn National Gaming, Inc. (PENN): Free Stock Analysis Report
 
Melco Crown Entertainment Limited (MLCO): Free Stock Analysis Report
 
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