Markets
LVS

Could Las Vegas Sands Survive a Second Wave of COVID-19 Closures?

Las Vegas Sands (NYSE: LVS) saw its stock nearly cut in half by the coronavirus pandemic, which caused the stock market to plunge in late March. Yet its stock was already falling fast because of the pandemic's impact on China, where COVID-19 originated.

The casino operator generates over 60% of its revenue from Macao, the only place in China where it's legal to gamble, so its fortunes depend more on how its business overseas is doing than whether Las Vegas is locked down again.

Ball spinning on roulette wheel

Image source: Getty Images.

Hoping for Lady Luck to smile

Macao recently began reissuing tourist visas and Beijing is starting to relax its requirement that people wear masks in public, but that still might not be enough to woo gamblers back to casinos. Gross monthly gaming revenue is down 80% in 2020 after four consecutive months of revenue plummeting 90% or more.

Sands generated just $98 million in revenue in the second quarter, compared to $3.3 billion a year ago, and a $555 million profit turned into an $804 million loss this time around. Like Macao, even reopened casinos in Las Vegas are having a tough time pulling in gamblers, so new lockdown orders could be devastating.

It's a case of whether the travel and tourism industry can rebound. Both Macao and Las Vegas are destination cities, and resort operators like Sands, MGM Resorts, and Wynn Resorts rely upon consumers choosing to visit there. 

While Las Vegas Sands has $3 billion in cash and equivalents in the bank, it also has almost $14 billion in debt. Fortunately the earliest notes with a value of $1.8 billion don't mature until 2023, so new lockdowns, while undoubtedly wrecking the casino's finances, likely wouldn't put it under.

LVS Chart

LVS data by YCharts

10 stocks we like better than Las Vegas Sands
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Las Vegas Sands wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of August 1, 2020

 

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

LVS WYNN MGM

Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More