Why Is Wynn (WYNN) Up 1% Since Last Earnings Report?
It has been about a month since the last earnings report for Wynn Resorts (WYNN). Shares have added about 1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Wynn due for a pullback? 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 Q4 Earnings Lag Estimates, Revenues Top
Wynn Resorts reported fourth-quarter 2022 results, with earnings missing the Zacks Consensus Estimate and revenues surpassing the same. The top line declined year over year, while the bottom line improved from the prior-year quarter's figure.
Craig Billings, CEO of Wynn Resorts, Limited, stated, "In Macau, we were honored to be awarded with a new 10-year gaming concession during the quarter and were pleased to experience a meaningful return of visitation and demand during the recent Chinese New Year holiday period. We believe we are well-positioned for success in Macau’s next phase of growth."
Q4 Earnings & Revenues
During the quarter, the company reported an adjusted loss of $1.23 per share, wider than the Zacks Consensus Estimate of a loss of $1.17. In the prior-year quarter, the company reported an adjusted loss of $1.37 per share.
Quarterly revenues of $1,004.9 million surpassed the consensus mark of $941 million. However, the top line declined 4.6% on a year-over-year basis. The downside was mainly due to the dismal performance of Wynn Palace and Wynn Macau.
Wynn Palace Operations
During the fourth quarter, Wynn Palace revenues were $113.1 million compared with $194 million reported in the prior-year quarter. Casino revenues in the reported quarter totaled $68.9 million compared with $145.9 million reported in the prior-year quarter. Rooms and food and beverage revenues declined 20.8% and 0.3% year over year to $12.3 million and $11.5 million, respectively. During the quarter under review, entertainment, retail and other revenues declined 3.3% year over year to $20.4 million.
In the VIP segment, table games turnover was $ 1,047.5 million, down 11.9% year over year. VIP table games win (loss) rate (based on turnover) was 0.11%, below the expected range of 3.1-3.4%. The figure was below the 2.59% reported in the prior-year quarter. Table drop in the mass market segment was $ 373.3 million compared with $592.1 million reported in the prior-year quarter. Table games’ wins in mass market operations amounted to $86.9 million compared with $134.2 million reported in the prior-year quarter.
During the reported quarter, RevPAR declined 22.3% year over year to $73. Occupancy levels in the segment came in at 50.1% compared with 50.9% reported in the prior-year quarter. The average daily rate (ADR) during the quarter came in at $146, down 21.1% on a year-over-year basis.
Wynn Macau Operations
During the fourth quarter, Wynn Macau’s revenues amounted to $77.2 million compared with $131.7 million reported in the prior-year quarter. The downside was primarily due to a fall in the casino, rooms and entertainment, retail and other revenues.
Casino revenues in the reported quarter were $51.4 million, down 47.2% year over year. Rooms and entertainment, retail and other revenues declined 37.7% and 20.2% year over year to $7.1 million and $11.2 million, respectively. During the quarter, food and beverage revenues declined 15.3% year over year to $7.5 million.
Table games turnover in the VIP segment declined 49.9% year over year to $429.6 million. The VIP table games win rate (based on turnover) was 1.2%, below the expected range of 3.1-3.4%. Also, the figure was lower than 2.85% reported in the prior-year quarter.
Table drop in the mass market segment was $ 317.8 million compared with $527.2 million reported in the prior-year quarter. Table games’ win in the mass market category was $54.7 million compared with $91.5 million reported in the prior-year quarter.
During the reported quarter, RevPAR fell 37.5% year over year to $70. Occupancy levels in the segment came in at 51.8% compared with 55.2% in the prior-year quarter. However, ADR came in at $135, down 33.8% year over year.
Las Vegas Operations
During the fourth quarter, revenues from Las Vegas operations were $585.5 million compared with $493.9 million reported in the year-ago quarter.
Casino revenues increased 16.6% year over year to $141.3 million. Revenues from food and beverage, rooms and entertainment, retail and other increased 12.8%, 19.5% and 35.9% year over year to $176.1 million, $190.6 million and $77.4 million, respectively.
Table games drop inched up 1.1% year over year to $590.7 million. Table games wins increased 3.5% year over year to $125.4 million. During the fourth quarter, table games win percentage of 21.2% was below the projected range of 22-26%. However, the figure was above 20.8% reported in the prior-year quarter.
During the quarter under review, RevPAR increased 16.6% year over year to $443. The occupancy rate came in at 89.9%, up from 86.3% reported in the prior-year quarter. ADR was $492, up 11.6% year over year.
Encore Boston Harbor
During the fourth quarter, revenues from Encore Boston Harbor operations amounted to $218.3 million compared with $204 million reported in the prior-year quarter. During the quarter, table games win percentage of 21.9% was within the projected range of 18-22%. However, the figure was below 22.2% reported in the prior-year quarter.
During the reported quarter, RevPAR increased 27.9% year over year to $380. The occupancy rate came in at 93.9%, up from 87.2% reported in the prior-year quarter. ADR was $404, up 18.5% year over year.
Operating Performance
During the fourth quarter, adjusted property EBITDAR was $195.1 million compared with $149.1 million reported in the prior-year quarter.
In the quarter under review, adjusted property EBITDAR from Wynn Macau totaled ($35.2) million compared with ($24.5) million reported in the prior-year quarter. Adjusted property EBITDAR from Las Vegas operations was $219.3 million compared with $186.2 million reported in the year-ago quarter. Adjusted property EBITDAR from Encore Boston Harbor was $63.3 million compared with $68.2 million reported in the prior-year quarter.
Cash Position
As of Dec 31, 2022, Wynn Resorts’ cash and cash equivalents totaled $3.65 billion compared with $1.94 billion as of Sep 30, 2022.
Total current and outstanding debt at the end of the fourth quarter amounted to $12.12 billion. The figure included $3.14 billion of Wynn Las Vegas-related debt, $6.19 billion of Macau debt, $2.17 billion of Wynn Resorts Finance debt and $613.5 million of debt held by the retail joint venture, which the company consolidated.
2022 Highlights
Total revenues in 2022 came in at $3,756.8 million compared with $3,763.7 million in 2021.
Adjusted EBITDAR in 2022 came in at $725.4 million compared with $569.4 million in 2021.
In 2022, adjusted earnings per share (EPS) came in at $(4.47) compared with $(6.12) reported in the previous year
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 62.86% due to these changes.
VGM Scores
Currently, Wynn has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Wynn has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Wynn Resorts, Limited (WYNN) : Free Stock Analysis Report
