Analysts covering Melco Resorts & Entertainment Limited (NASDAQ:MLCO) are optimistically predicting triple-digit earnings per share to of 119.59% over the following three years. At a current EPS of $0.523, this growth rate means shareholders can expect an impending EPS of $1.148. To determine whether this growth rate expectation is justified, we should take a look at how the company has been performing in the past. See our latest analysis for MLCO
Exciting times ahead?If you are bullish about Melco Resorts & Entertainment’s growth potential then you are certainly not alone. Expectations from 18 analysts are very high, with earnings expected to rise from today’s level of $0.523 to $1.148 over the next couple of years. This illustrates a relatively optimistic outlook in the near term, with a relatively solid earnings per share growth rate of 119.59% over the next few years. In the same period we will see the revenue increase from $4,921M to $5,880M and profits (net income) are predicted to shoot from $255M to $560M in the next couple of years, more than doubling from the most recent level. Though, at the current levels of revenue and profit, margins are certainly underwhelming.
Is the growth built on solid basis?The past can be a helpful indicator for future performance for a stock. We can determine whether this level of expected growth is excessive or whether the company continues to go from strength to strength. MLCO’s earnings growth in the last five years was a low 0.11%, indicating a relatively more bullish outlook for the company in the near future. This belief may be supported by turnaround initiatives implemented in the past, or previous investments coming to fruition.
For MLCO, I’ve compiled three fundamental factors you should further research:
1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Valuation: What is MLCO worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MLCO is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of MLCO? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!