Yahoo Finance Why Is Wynn (WYNN) Down 7.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Wynn Resorts (WYNN). Shares have lost about 7.4% 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 the most recent earnings report in order to get a better handle on the important drivers.
Wynn Resorts Q1 Earnings & Revenues Top Estimates
Wynn Resorts reported impressive first-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Also, the top and bottom lines grew year over year.
Q1 Earnings & Revenues
During the quarter, the company reported adjusted earnings of 29 cents per share against the Zacks Consensus Estimate of a loss of 18 cents. In the prior-year quarter, the company reported an adjusted loss of $1.21 per share.
Quarterly revenues of $1,423.7 million surpassed the consensus mark of $1,254 million by 13.5%. Also, the top line increased 49.3% on a year-over-year basis. The upside was mainly attributed to high contributions from all its operating segments along with a rise in gaming volumes, hotel occupancy, and covers at restaurants.
Wynn Palace Operations
During the first quarter of 2023, Wynn Palace’s operating revenues were $369.4 million compared with $163.3 million reported in the prior-year quarter. Casino revenues in the reported quarter totaled $270.7 million compared with $114.4 million reported in the prior-year quarter. Rooms, and food and beverage revenues surged 239.2% and 105.8% year over year to $46.9 million and $23.6 million, respectively. During the quarter under review, entertainment, retail and other revenues increased 19.4% year over year to $28.2 million.
In the VIP segment, table games turnover was $ 2,293.4 million, up 137.5% year over year. VIP table games win (loss) rate (based on turnover) was 2.72%, up from 2.05% reported in the prior-year quarter. Table drop in the mass market segment was $1,182 million compared with $531.9 million reported in the prior-year quarter. Table games wins in mass market operations amounted to $260.9 million compared with $111.2 million reported in the prior-year quarter.
During the reported quarter, RevPAR increased 231.8% year over year to $282. Occupancy levels in the segment came in at 88.1% compared with 47.2% reported in the prior-year quarter. The average daily rate (ADR) during the quarter came in at $321, up 78.3% on a year-over-year basis.
Wynn Macau Operations
During the first quarter, Wynn Macau’s operating revenues amounted to $230.7 million compared with $135.1 million reported in the prior-year quarter. The upside was primarily attributed to the increase in casino, rooms and entertainment, retail and other revenues.
Casino revenues in the reported quarter were $176.4 million, up 72.2% year over year. Rooms, and entertainment, and retail and other revenues grew 134% and 21.3% year over year to $22 million and $18.1 million, respectively. During the quarter, food and beverage revenues increased 70.5% year over year to $14.3 million.
Table games turnover in the VIP segment increased 29% year over year to $1,144.2 million. The VIP table games win rate (based on turnover) was 2.69%, lower than 3.84% reported in the prior-year quarter.
Table drop in the mass market segment was $990 million compared with $469.1 million reported in the prior-year quarter. Table games win in the mass market category was $168.4 million compared with $82.3 million reported in the prior-year quarter.
During the reported quarter, RevPAR grew 134% year over year to $220. Occupancy levels in the segment came in at 90.9% compared with 49.8% in the prior-year quarter. Also, ADR came in at $242, up 28.7% year over year.
Las Vegas Operations
During the first quarter, operating revenues from Las Vegas operations were $586.8 million compared with $441.2 million reported in the year-ago quarter.
Casino revenues increased 24.3% year over year to $154.5 million. Revenues from food and beverage, rooms and entertainment, retail and other increased 26.8%, 40.8% and 51% year over year to $172.5 million, $185.1 million and $74.6 million, respectively.
Table games drop was up 9.6% year over year to $600.7 million. Table games wins increased 13% year over year to $146 million. During the first quarter, table games win percentage of 24.3% was above 23.6% reported in the prior-year quarter.
During the quarter under review, RevPAR increased 31.5% year over year to $438. The occupancy rate came in at 88.8%, up from 76.9% reported in the prior-year quarter. ADR was $493, up 14.1% year over year.
Encore Boston Harbor
During the first quarter, operating revenues from Encore Boston Harbor operations amounted to $216.3 million compared with $190.8 million reported in the prior-year quarter. Revenues from rooms, food and beverage, and entertainment, retail and other increased 18.2%, 22.6% and 23.2% year over year to $18.5 million, $22.3 million and $10.1 million, respectively.
During the quarter, table games win percentage of 21.7% was below 22.2% reported in the prior-year quarter.
During the reported quarter, RevPAR increased 18.4% year over year to $309. The occupancy rate came in at 90%, up from 80.5% reported in the prior-year quarter. ADR was $343, up 5.9% year over year.
Operating Performance
During the first quarter of 2023 adjusted property EBITDAR was $429.7 million compared with $177.6 million reported in the prior-year quarter.
In the quarter under review, adjusted property EBITDAR from Wynn Macau totaled $44.7 million compared with ($4,682) million reported in the prior-year quarter. Adjusted property EBITDAR from Las Vegas operations was $231.6 million compared with $159.4 million reported in the year-ago quarter. Adjusted property EBITDAR from Encore Boston Harbor was $63.4 million compared with $55.3 million reported in the prior-year quarter.
Cash Position
As of Mar 31, 2023, Wynn Resorts’ cash and cash equivalents totaled $3.84 billion compared with $3.65 billion as of 2022-end.
Total current and outstanding debt at the end of first-quarter 2023 amounted to $12.25 billion. The figure included $2.64 billion of Wynn Las Vegas-related debt, $6.75 billion of Macau debt, $2.25 billion of Wynn Resorts Finance debt and $613.6 million of debt held by the retail joint venture, which the company consolidated.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 206.67% due to these changes.
VGM Scores
At this time, Wynn has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 looks promising. It comes with little surprise Wynn has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Wynn belongs to the Zacks Gaming industry. Another stock from the same industry, PENN Entertainment (PENN), has gained 3.7% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.
PENN Entertainment reported revenues of $1.67 billion in the last reported quarter, representing a year-over-year change of +7%. EPS of $0.31 for the same period compares with $0.29 a year ago.
For the current quarter, PENN Entertainment is expected to post earnings of $0.41 per share, indicating a change of +173.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +3.4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for PENN Entertainment. Also, the stock has a VGM Score of B.
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