Wynn Resorts to Rise on Increase in Macau Gaming Revenue

Wynn Palace CotaiWynn Resorts (NASDAQ: WYNN), the casino operator has reported a loss in the 3rd quarter of the fiscal year 2016 as compared to the similar period last year. It is surprising to note that there is a shortage of revenue even after the grand opening of Wynn Palace. This is quite contrary to the expectations of the market. This shortage of income has given the punters the chance to hammer the stocks to a low of $86.73 as on last Thursday. In spite of missing the earning target as speculated by the analysts, it is certain that the casino operator will bounce back in the current quarter and the reason is mentioned below.

This Las Vegas-based casino company has reported revenue of $1.11 billion in the 3rd quarter as compared to the figure of $996.29 million during the same period last year. Still, the revenues of the company were way less than the Wall Street estimates of $1.13 billion.

In the 3rd quarter of the financial year 2016-17, there is a drop or net loss of $0.17 per share or $17.44 million as compared to a net profit of $0.95 per share or $96.21 million during the same quarter in 2015.


If we exclude the charges like property charges, pre-opening costs and income tax impacts on adjustments, the non-GAAP income in Q3 2016 dipped to $76.18 million or $0.75 per share compared to the figure of $0.86 per share or $87.57 million in the corresponding quarter of previous year. For the quarter 3 of this year, Zacks analysts are anticipating earnings of $0.78 per share.

In the 3rd quarter of this year, the adjusted property EBITDA rises by $305.4 million by 9.1% as compared to $279.9 million figure during the same period last year.

Wynn Palace has managed to generate revenue of $164.6 million during its six weeks of operation. This figure is marginally lower than the value of $169 speculated by the analysts. Matt Maddox, the company President, believes that the casino will take some amount of time to increase the revenue.

The Chief Executive Officer of Wynn Resorts, Steve Wynn has said that the barricades around the Wynn Palace have hindered the flow of the visitors to the casino. Moreover, he believes that it is quite early to judge the performance of a casino with mere six weeks of operation. So, it is entirely unjustifiable to have a bearish view on the stocks of Wynn Palace. By the end of the current quarter, a clear picture of the casino will be in front of everyone. It is to be noted that the company has declared a quarterly cash dividend of $0050 per share which will be payable on November 29th of this year.

In September, there is an increase of 7.4% or 18.4 billion patacas ($2.3 billion) in the Macau Gaming revenue. The gaming revenue has recorded a growth of 1.1% in August after 26 months of decline. It is likely that there will be an increase in the income of all casinos and Wynn Palace in particular because of the holiday season ahead. If we consider the overbeaten scenario, it is better to remain long in the stock.

The stock has found support at 86 after falling nearly by 14%. There is an indication of high probability in the bounce back of shares because the scholastic oscillator is in the oversold region.

Wynn Resorts Stock Price - November 9th 2016

Wynn Resorts Stock Price: November 9th, 2016

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