A month has gone by since the last earnings report for Wynn Resorts (WYNN). Shares have lost about 4.7% 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 its most recent earnings report in order to get a better handle on the important drivers.
Wynn Resorts reported impressive fourth-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Also, the top and the bottom line rose year over year.
During the quarter, the company reported adjusted earnings per share (EPS) of $1.91, beating the Zacks Consensus Estimate of $1.12 by 70.5%. In the prior-year quarter, the company reported an adjusted loss of $1.23 per share.
Quarterly revenues of $1.8 billion surpassed the consensus mark of $1.7 billion by 7%. Also, the top line increased 83.1% on a year-over-year basis. Solid contributions from Macau and Las Vegas Operations backed the upside.
During the fourth quarter of 2023, Wynn Palace’s operating revenues were $524.4 million compared with $113.1 million reported in the prior-year quarter. Our model predicted segmental revenues at $552.2 million.
Casino revenues in the reported quarter totaled $417.3 million compared with $68.9 million reported in the prior-year quarter. Rooms and food and beverage revenues surged a whopping 311.5% and 156.4% year over year to $50.5 million and $29.5 million, respectively. During the quarter under review, entertainment, retail and other revenues increased 33% year over year to $27.1 million.
In the VIP segment, table games turnover was $3.16 billion, up 201.8% year over year. VIP table games win (loss) rate (based on turnover) was 2.97% compared with 0.11% reported in the prior-year quarter. Table drop in the mass market segment was $1.71 billion compared with $373.3 million reported in the prior-year quarter. Table game wins in mass market operations amounted to $404.5 million compared with $86.9 million reported in the prior-year quarter.
During the reported quarter, revenue per available room, or RevPAR, increased 319.2% year over year to $306. Occupancy levels in the segment were 98.3% compared with 50.1% reported in the prior-year quarter. The average daily rate (ADR) during the quarter was $311, up 113% on a year-over-year basis.
During the fourth quarter, Wynn Macau’s operating revenues amounted to $386.2 million compared with $77.2 million reported in the prior-year quarter. For this business operation, we projected year-over-year growth of 289.5% to $300.7 million.
Casino revenues in the reported quarter were $320.6 million, up 523.6% year over year. Rooms and entertainment and retail and other revenues surged 313.4% and 36.5% year over year to $29.5 million and $15.3 million, respectively. During the quarter, food and beverage revenues increased 178.5% year over year to $20.8 million.
Table games turnover in the VIP segment increased 227.2% year over year to $1.4 billion. The VIP table games win rate (based on turnover) was 4.37%, up from 1.20% reported in the prior-year quarter.
Table drop in the mass market segment was $1.56 billion compared with $317.8 million reported in the prior-year quarter. Table games win in the mass market category was $297.7 million compared with $54.7 million reported in the prior-year quarter.
During the reported quarter, RevPAR grew 301.4% year over year to $281. Occupancy levels in the segment were 99.4% compared with 51.8% in the prior-year quarter. Furthermore, ADR was $282, up 108.9% year over year.
During the fourth quarter, operating revenues from Las Vegas operations were $696.8 million compared with $585.5 million reported in the prior-year quarter. Our projection for the metric was $586.4 million.
Casino revenues increased 18.6% year over year to $167.6 million. Revenues from food and beverage grew 13.4% to $199.7 million. Also, the revenues for rooms as well as entertainment, retail and other increased by 27.5% and 11.7% year over year to $243 million and $86.5 million, respectively.
Table games drop was up 11.3% year over year to $657.5 million. Table game wins also increased 33.2% year over year to $167.1 million. During the fourth quarter, table games win percentage of 25.4% was above 21.2% reported in the prior-year quarter.
During the quarter under review, RevPAR rose 26.6% year over year to $561. The occupancy rate was 88.9%, up from 89.9% reported in the prior-year period. ADR was $631, up 28.3% year over year.
During the fourth quarter, operating revenues from Encore Boston Harbor operations amounted to $217.1 million, down from $218.3 million reported in the prior-year quarter. Our projection for the metric was $229.8 million.
Casino revenues dropped 0.7% year over year to $160.5 million. Revenues from rooms increased 4.5% year over year to $24.3 million. Revenues from food and beverage and entertainment, retail and other declined by 4.4% and 1.6% year over year to $21.6 million and $10.8 million, respectively.
During the quarter, table games win percentage of 22% was below 21.9% reported in the prior-year quarter.
During the reported quarter, RevPAR increased 3.9% year over year to $395. The occupancy rate was 93.3%, down from 93.9% reported in the prior-year quarter. ADR was $424, up 5% year over year.
During the fourth quarter of 2023, adjusted property EBITDAR was $630.4 million compared with $195.1 million reported in the prior-year quarter.
In the quarter under review, adjusted property EBITDAR from total Macau totaled $297 million against ($59.1) million reported in the prior-year quarter. Adjusted property EBITDAR from Las Vegas operations was $270.8 million compared with $219.3 million reported in the year-ago quarter. Adjusted property EBITDAR from Encore Boston Harbor was $64.4 million compared with $63.3 million reported in the prior-year quarter.
As of Dec 31, 2023, Wynn Resorts’ cash and cash equivalents totaled $2.88 billion compared with $2.79 billion reported as of Sep 30, 2023.
Total current and outstanding debt at the end of fourth-quarter 2023 amounted to $11.74 billion. The figure included $2.25 billion of Wynn Las Vegas-related debt, $6.74 billion of Macau debt, $2.13 billion of Wynn Resorts Finance debt and $614.1 million of debt held by the retail joint venture, which the company consolidated.
During the quarter, WYNN launched its concession-related capital project in collaboration with Illuminarium, and received positive customer feedback. The company is actively planning other concession-related projects like the Destination Food Hall, an entertainment center and a production show. The company reported solid progress with respect to the construction at Wynn Al Marjan Island. It reported substantial completion of the hotel tower and podium foundation. The management is optimistic in the resort's potential to become a prominent tourism hotspot in the UAE.
Total revenues in 2023 came in at $6.5 billion compared with $3.8 billion in 2022.
Adjusted EBITDAR in 2023 came in at $2.1 billion compared with $725.4 million in 2022.
In 2023, adjusted EPS came in at $4.10 against $(4.47) reported in the previous year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 17.99% due to these changes.
VGM Scores
Currently, Wynn has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the second quintile 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 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.
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