Should You Buy Wynn Resorts (WYNN) Stock Ahead of Q1 Earnings?

Wynn Resorts, Limited WYNN is scheduled to release first-quarter 2024 results on May 7, 2024, after the closing bell. In the previous quarter, the company delivered an earnings surprise of 70.5%.

How are Estimates Placed?

The Zacks Consensus Estimate for first-quarter bottom line is pegged at $1.43 per share, indicating a surge of 393.1% from 29 cents reported in the year-ago quarter.

For revenues, the consensus mark is pegged at nearly $1.8 billion. The metric suggests an improvement of 24.6% from the year-ago quarter’s figure.

Wynn Resorts, Limited Price and EPS Surprise

 

Wynn Resorts, Limited Price and EPS Surprise

Wynn Resorts, Limited price-eps-surprise | Wynn Resorts, Limited Quote

 

Let's look at how things have shaped up in the quarter.

Factors to Note

Wynn Resorts’ first-quarter performance is likely to have benefited from an uptick in visitation and demand, particularly in the Las Vegas and Macau regions. This and strength in mass casino drop, direct VIP turnover, luxury retail sales and hotel revenues are likely to have aided the company’s top line in the to-be-reported quarter. We expect revenues from Macau operations to rise 34.3% year over year to $806 million.

Emphasis on the Super Bowl and Chinese New Year events and an uptick in group and convention businesses are likely to have aided the company's first-quarter performance. The company reported that the front money and credit for the period between the Super Bowl and Chinese New Year have doubled on a year-over-year basis, paving a path for robust hotel revenues during the Super Bowl.

Increased visitation in the Las Vegas market and strong contributions from RevPAR table drop, slot handle and food and beverage are likely to have supported the company’s performance in the to-be-reported quarter. Per our model, revenues from Las Vegas operations are expected to rise 6.8% year over year to $626.7 million.

Strong contributions from Encore Boston Harbor might have aided the company’s first-quarter top line. The emphasis on development projects (including incremental parking, food and beverage and entertainment amenities) and increased sign-ups (to the Wynn Rewards loyalty program) have been a catalyst for WYNN. The momentum is expected to have driven top-line growth. We expect revenues from Encore Boston Harbor to rise 2.4% year over year (to $221.5 million) in the first quarter.

However, challenges such as a softer macroeconomic environment in China and winter storms might have dampened visitation during the first quarter. An increase in operating expenses could further dent profitability for the period.

Our take

Given the information provided, investors might find it advantageous to contemplate acquiring Wynn Resorts’ shares before the unveiling of its first-quarter results. Encouraging signals, such as anticipated rises in visitation and demand, coupled with a strong performance during events like the Super Bowl and Chinese New Year and an increase in group and convention businesses, hint at the potential for favorable earnings outcomes.

Regarding valuation, WYNN shares present an appealing opportunity. With a forward 12-month price-to-earnings ratio of 17.67X, below the Zacks gaming-industry average of 31.68X, the stock offers compelling value for investors aiming for exposure to the gaming industry.

These positive indicators suggest that the company's growth trajectory remains promising, presenting an opportune moment for investors to consider investing in the stock ahead of first-quarter results.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Wynn Resorts this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Wynn Resorts has an Earnings ESP of +2.40%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company has a Zacks Rank #3.

Other Stocks Poised to Beat Earnings Estimates

Here are some other stocks from the Zacks Consumer Discretionary space that investors may consider, as our model shows that these, too, have the right combination of elements to post an earnings beat.

Central Garden & Pet Company CENT currently has an Earnings ESP of +4.32% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

CENT’s earnings for the to-be-reported quarter are expected to increase 15.3%. It reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 37.8%.

Funko, Inc. FNKO currently has an Earnings ESP of +6.90% and a Zacks Rank of 2.

FNKO’s earnings for the to-be-reported quarter are expected to increase 40.8%. It reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 42.8%.

Fox Corporation FOXA has an Earnings ESP of +8.73% and a Zacks Rank of 3.

FOXA is expected to register a 23.4% increase in earnings for the to-be-reported quarter. It reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 71.1%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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

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