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Las Vegas Sands (LVS) Outruns Peers, Surges 38% in a Year

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Las Vegas Sands Corp. LVS has done exceedingly well and emerged as an attractive investment option amid an intensely competitive gaming industry. This is evident from the company’s performance in a year’s time. While the stock has surged 37.8%, the industry rallied 26.4%.

We believe there is still momentum left in this Zacks Rank #1 (Strong Buy) company. This is because the stock has an earnings growth rate of 25.7% for 2018 and a Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.

Apart from Las Vegas, stocks such as Caesars Entertainment Corp. CZR, MGM Resorts International MGM and Century Casinos, Inc. CNTY that belong to the same industry have witnessed gains of 15.7%, 2.3% and 6.5%, respectively, in the past year.

Let’s delve deeper and find out the reason that kept Las Vegas ahead of its peers.

Impressive Earnings & Sales Trend

Las Vegas began 2018 on a positive note, with both top and bottom line beating the consensus mark for the fifth straight quarter, when it reported first-quarter 2018 results. Moreover, the company’s trailing four-quarter average positive earnings surprise is 17.5%. At Las Vegas, results were driven by robust performance across Macao, Singapore and Las Vegas in the first quarter.

In order to get a clear picture of what analysts are thinking about the company let’s look at Las Vegas’ earnings estimate revisions. In the past 30 days, the Zacks Consensus Estimate for 2018 and 2019 has moved north by 12.4% and 3.3% to $3.82 and $3.76, respectively. For second-quarter 2018, the consensus mark has moved up by 1 cent to 79 cents in the same time frame.

Solid Business Model

Las Vegas is one of the leading companies in the gaming and lodging industry. Additionally, its solid business model, extensive non-gaming revenue opportunities, high quality assets and attractive property locations are encouraging. In fact, the company’s strong portfolio has somewhat aided Las Vegas in withstanding the economic downturn in China, which has hurt its Macao operations.

Meanwhile, with the economic recovery in the United States, the company’s business should continue growing in Macao. Also, some entertainment offerings in the pipeline are expected to deliver increased profitability across the company’s properties.

Macao Business to Spur Growth Over the Long-term

Las Vegas generates a major part of its revenues from Macao. In first-quarter 2018, the company reported robust growth in its Macao business. EBITDA from Macao operation in the quarter was up 26% year over year to $789 million.

Expansion Efforts in Las Vegas Aid Profitability

Net revenues from Las Vegas operations that comprise The Venetian Las Vegas and The Palazzo, including the Sands Expo and Convention Center, increased 7.2% to $477 million owing to a 3.3%, 15.4% and 14.1% rise in rooms, casino and convention, retail and other revenues, respectively. Also, the company is concentrating on renovation and promotion of its Las Vegas properties in order to drive segmental performance. In fact, the Las Vegas Strip has been recording high occupancy rates over the past year.

The improvement in employment rate and rise in tourism numbers in the region has been increasing demand at the company’s properties in Las Vegas. Further, the diversification of its resort portfolio and non-gaming options should contribute to significant revenue growth.

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Las Vegas Sands Corp. (LVS) : Free Stock Analysis Report
 
MGM Resorts International (MGM) : Free Stock Analysis Report
 
Century Casinos, Inc. (CNTY) : Free Stock Analysis Report
 
Caesars Entertainment Corporation (CZR) : Free Stock Analysis Report
 
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