On Monday, Seaport Global Securities initiated coverage on Wynn Resorts (NASDAQ:WYNN) with a Neutral rating. The firm forecasts that in 2024, Macau will account for 53% of Wynn Resorts' consolidated revenues, with Las Vegas contributing 35%, and Boston 12%.
Wynn's Las Vegas operations, which include two properties, are recognized as leaders in the luxury and premium customer segments. The company has seen significant revenue growth in Las Vegas, with a more than 50% increase from 2019 to 2023, and a substantial rise in Property EBITDA.
Despite the past success, Seaport Global anticipates challenges for Wynn Resorts in Las Vegas in 2024 following two years of robust growth and pricing power.
"While revenue is projected to remain relatively flat in 2024 (followed by low single digit % growth in 2025), EBITDA will contract nearly 7% due to higher costs (largely from labor increases) which will be difficult to tamper down, while 2025 should see recovery in EBITDA but still below 2023 level," said the analysts.
The outlook for Wynn's Boston operations is also cautious, with an expected low single-digit percentage revenue decline in 2024, followed by a modest recovery in 2025. The firm notes that an expansion planned for post-2025 could improve foot traffic and performance at the Boston property.
Wynn Resorts' foray into the US digital market was also addressed, with the company having abandoned its digital efforts due to limited scale and intense competition from larger, more established operators. This strategic withdrawal is seen as a positive move by Seaport Global Securities, acknowledging the challenging landscape of the digital market.
InvestingPro Insights
Wynn Resorts (NASDAQ:WYNN) has been navigating through a dynamic market landscape, and real-time data from InvestingPro provides a deeper look into the company's financial health and stock behavior. According to InvestingPro data, Wynn Resorts boasts an impressive market capitalization of $11.34 billion. The company's revenue growth has been remarkable, with a surge of 73.87% in the last twelve months as of Q4 2023, outpacing the quarterly growth rate of 83.14% for Q4 2023. This aligns with the substantial revenue increase noted in Wynn's Las Vegas operations.
The company's gross profit margins stand strong at 67.26%, reflecting its ability to maintain profitability in a competitive environment. This is particularly noteworthy given the InvestingPro Tip highlighting Wynn's impressive gross profit margins, which may resonate with investors looking for companies with robust profitability metrics. Additionally, Wynn Resorts has maintained a P/E ratio of 13.06, adjusted for the last twelve months as of Q4 2023, indicating the market's valuation of its earnings.
InvestingPro Tips also suggest that Wynn's stock price movements are quite volatile, which may be of interest to traders looking for opportunities in price fluctuations. For those considering a deeper analysis, there are more InvestingPro Tips available, and using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. There are 4 additional InvestingPro Tips listed for Wynn Resorts, offering further insights for potential investors.
Overall, the financial data and tips from InvestingPro provide valuable context for Seaport Global Securities' outlook on Wynn Resorts, painting a picture of a company with strong fundamentals, but also one that faces the challenges of a volatile market and rising costs.
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