Why has Wynn (WYNN) risen 2.4% since the last earnings report?
IIt’s been about a month since the last Wynn Resorts (WYNN) revenue report. Stocks rose about 2.4% during that time, outperforming the S&P 500.
Will the recent positive trend continue until its next results release, or does Wynn need to take a setback? Before we dive into how investors and analysts have reacted in recent times, let’s take a quick look at his latest earnings report to better understand the important factors.
Wynn Resorts Unestimated first quarter profit and revenue
Wynn Resorts has released its first quarter 2021 results, with profit and revenue missing from Zacks’ consensus estimate. The top and bottom lines missed the consensus mark for the seventh consecutive quarter.
The company reported an adjusted loss of $ 2.41 per share, larger than Zacks’ consensus estimate of a loss of $ 2. In the quarter of the previous year, the company reported an adjusted loss of $ 3.54 per share.
Revenue in the first quarter was $ 725.8 million, missing Zacks’ consensus estimate of $ 760 million by 4.5%. Revenue was also down 23.9% year-on-year due to dismal performance of the operations of Wynn Palace, Wynn Macau and Las Vegas.
Wynn Palace operations
In the first quarter, Wynn Palace’s revenue fell 8.5% year-over-year to $ 237.3 million. Casino revenues were $ 185.9 million, down 10.4% year over year. Room and food and beverage revenues declined 13.7% and 12.2% year-over-year to $ 17 million and $ 11.7 million, respectively. In the first quarter, entertainment, retail and other revenue grew 20.1% year-over-year to $ 22.7 million.
In the VIP segment, table game revenue was $ 2,200.2 million, down 54.1% year-over-year. The VIP table games win rate (based on revenue) was 4.38%, above the expected range of 2.7-3%. It was also higher than the 2.91% figure recorded a year ago. The table’s drop in the mass market segment amounted to $ 607.5 million, up 27.8% from the figure reported in the previous year’s quarter. In addition, earnings from table games in mass market operations amounted to $ 131.6 million, up 0.7% year-over-year.
In the reported quarter, the average daily rate (ADR) was $ 178 (down 39.5%, year-over-year). The occupancy rate stood at 60.4% against 41.6% for the quarter of the previous year. Meanwhile, revenue per available room (RevPAR) stands at $ 108 (down 11.5%, year-over-year).
Wynn Macao Operations
In the first quarter, Wynn Macau’s revenue fell 21.7% year-over-year to $ 179.7 million. The decrease is due to lower revenues from casinos, rooms, food and beverage.
Notably, casino revenues in the reported quarter plunged 26.9% year-over-year to $ 138.9 million. Room and food and beverage revenues fell 7.6% and 22% year-over-year to $ 14.7 million and $ 7.4 million, respectively. In the first quarter, entertainment, retail and other revenue increased 33.6% year-over-year to $ 18.6 million.
Table game revenue in the VIP segment was down 39.1% year-over-year to $ 1,804.4 million. However, the VIP table games win rate (based on revenue) was 3.25%, above the expected range of 2.7-3.0%. However, it was lower than the 4.14% reported in the previous year’s quarter.
The table decline in the mass market segment was $ 590.9 million, up 2.2% year-over-year. However, table games won in the mass market category amounted to $ 105.2 million, down 10.8% year-over-year.
During the reported quarter, occupancy rates in the segment increased to 60.8% from 49.2% in the previous year quarter. However, ADR stood at $ 242, down 24.6% year over year. Additionally, RevPAR fell 7% year-on-year to $ 147.
Las Vegas operations
In the first quarter, revenues from Las Vegas operations plunged 44.8% year-on-year to $ 178.7 million due to low occupancy levels.
Casino revenues increased 12.1% year-on-year to $ 79.9 million. However, revenues from food and beverages, rooms as well as entertainment, retail and other were down 62.2%, 62.5% and 53.1% year over year. at $ 40.1 million, $ 39.8 million and $ 19 million, respectively.
Additionally, the decline in table games fell 21.8% year-on-year to $ 324.5 million. Additionally, table game payouts declined 7.3% year-on-year to $ 76.7 million. During the quarter, the table game winning percentage of 23.6% was in the projected range of 22-26% and above 19.9% reported in the quarter of the previous year.
In the reported quarter, RevPAR fell 60.9% year-on-year to $ 117. The occupancy rate was 35.3%, compared to 80.1% in the quarter of the previous year. ADR stood at $ 331, down 11.5% year over year.
Boston Harbor again
Encore Boston Harbor closed all of its operations on March 15 for the remainder of Q1 and Q2 2020. On July 10, Encore Boston Harbor reopened operations. After the reopening, some food and drink outlets had remained temporarily closed with limited hotel operations. On November 6, a Massachusetts directive put in place a nighttime curfew at some businesses. For this reason, Encore Boston Harbor has limited its daily hours of operation and has temporarily closed the hotel tower. Following the easing of restrictions on January 25, 2021, Encore Boston Harbor has reinstated some operations and reopened its hotel tower on a weekly schedule (Thursday through Sunday). However, capacity restrictions are still in place.
In the first quarter, revenues from operations of Encore Boston Harbor declined 7.7% year-on-year to $ 130.1 million. During the quarter, the winning percentage at table games of 21.1% was within the expected range of 18-22% and above the 20.8% reported in the quarter of the previous year.
Meanwhile, Adjusted Real Estate EBITDA from Still Boston Harbor operations was $ 30.4 million compared to $ (12.6) million reported in the prior year quarter.
In the fourth quarter, adjusted real estate income before interest, taxes, depreciation and amortization (EBITDA) was $ 58.9 million compared to $ (5.3) million in the previous year quarter.
In the quarter under review, Macau’s adjusted real estate EBITDA was $ 16.6 million, compared to $ 19.2 million reported in the previous year quarter. Adjusted real estate EBITDA from Las Vegas operations was $ 28.1 million versus ($ 22.1 million reported in the prior year quarter). Meanwhile, Wynn Palace’s adjusted real estate EBITDA from operations was $ 27.4 million, up from $ 10.2 million reported in the previous year quarter.
As of March 31, 2021, Wynn Resorts’ cash and cash equivalents totaled $ 2.89 billion.
Outstanding debt at the end of the first quarter was $ 11.95 billion, including $ 3.12 billion in Wynn Las Vegas-related debt, $ 5.96 billion in Macau debt, 2 , $ 26 billion in debt from Wynn Resorts Finance and $ 612.5 million in debt held by the retail joint venture, which the company consolidated.
On the development front, Wynn Resorts has made significant progress over Wynn Interactive. To this end, the company has entered into a definitive agreement with Austerlitz Acquisition Corporation to make it a public entity. The business combination includes approximately $ 640 million of cash proceeds from Austerlitz Acquisition Corp. In particular, the initiative is likely to boost Wynn Interactive’s prospects with additional capital and expertise to accelerate its vision as a stand-alone company.
In this regard, Matt Maddox, CEO of Wynn Resorts and President of Wynn Interactive, said, “We are confident that this transaction will unlock the enormous potential of Wynn Interactive to further accelerate growth and enable the company to capture the huge opportunity in North America. . “
The company plans to close the deal by the end of 2021, subject to Austerlitz shareholder approval, clearance from gaming authorities and other customary closing conditions.
How have the estimates evolved since then?
Over the past month, investors have witnessed a downward trend in the new estimates. The consensus estimate has changed by 7.74% due to these changes.
Right now, Wynn has a Growth score below D, a score with the same score on the momentum front. By following the exact same price, the stock was given a rating of D on the value side, placing it in the bottom 40% for that investment strategy.
Overall, the stock has an overall VGM score of F. If you’re not strategy-focused, this score is the one you should be interested in.
Estimates are broadly trending down for the stock, and the magnitude of these revisions looks promising. Notably, Wynn has a Zacks Rank # 3 (Hold). We expect the stock to come back online in the coming months.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.