Wynn Resorts Earnings Preview

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Investors braced for a bumpy ride ahead of Wynn Resorts' (NAS: WYNN) earnings announcement as the company has wavered between beating and falling short of analyst predictions during the past fiscal year. The company will unveil its latest earnings on Wednesday, Oct. 19. Wynn Resorts is a developer, owner, and operator of destination casino resorts. It owns and operates Wynn Las Vegas, Encore at Wynn Las Vegas, and Wynn Macau.

What analysts say:

  • Buy, sell, or hold?: The majority of analysts back Wynn Resorts as a buy. But with 54.5% of analysts rating it a buy, Wynn Resorts is still below the mean analyst rating of its nearest nine competitors, which average 66.7% buys. Analysts don't like Wynn Resorts as much as competitor Melco Crown Entertainment overall. Seven out of 10 analysts rate Melco Crown Entertainment a buy compared to 12 of 22 for Wynn Resorts. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.
  • Revenue forecasts: On average, analysts predict $1.29 billion in revenue this quarter. That would represent a rise of 27.7% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $1.18 per share. Estimates range from $0.93 to $1.42.

What our community says:
The majority of CAPS All-Stars see Wynn as a good bet, with 70.8% granting it an "outperform" rating. The majority of the Fools are in agreement with the All-Stars as 70.5% give it an "outperform" rating. Fools are bullish on Wynn Resorts and haven't been shy with their opinions lately, logging 489 posts in the past 30 days. Wynn Resorts' bearish CAPS rating of one out of five stars falls short of the Fool community sentiment.

Management:
The company upped its gross margin by 3.1 percentage points in the last quarter. Revenue rose 32.4% while cost of sales rose 26% to $845.5 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

38.2%

38.3%

36.6%

35.1%

Operating Margin

15.6%

22.3%

18.6%

13.1%

Net Margin

8.9%

13.8%

9.2%

(3.3%)

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At the time this article was published

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