Did Melco Resorts’ (MLCO) Strong Macau Results and Debt Cuts Just Shift Its Investment Narrative?

• Melco Resorts & Entertainment reported third-quarter 2025 earnings with revenue of US$1.31 billion and net income of US$74.69 million, both showing growth over the previous year and surpassing analysts’ forecasts.
• An interesting insight is the company’s 21% year-over-year increase in Macau Property EBITDA and ongoing debt reduction initiatives, indicating strengthened core operations and financial discipline.
• We’ll explore how Macau’s strong operational gains and stable margins influence Melco Resorts & Entertainment’s ongoing investment narrative.

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What Is Melco Resorts & Entertainment's Investment Narrative?

For anyone considering Melco Resorts & Entertainment, the story hinges on confidence in Macau's long-term gaming recovery and the company's ability to turn market share gains into sustained profitability. The recent Q3 earnings beat, driven by a 21% jump in Macau Property EBITDA and progress on debt reduction, ties directly to the most immediate catalyst: a rebound in Macau and broader Asian tourism. With revenue and net income topping expectations, one short-term risk, sluggish post-pandemic gaming volumes, appears less acute for now. That said, challenges remain. Intense competition, especially in Macau, still puts pressure on margins and limits immediate upside. While the company’s debt load is being managed down, lingering financial leverage remains a factor to watch as interest costs bite into future gains. The new results strengthen the investment case but do not erase these competitive and financial headwinds.

But competition in Macau still poses a risk for future margins. Melco Resorts & Entertainment's shares have been on the rise but are still potentially undervalued. Find out how large the opportunity might be.

Exploring Other Perspectives

Six retail investors in the Simply Wall St Community offered fair value targets from US$1 up to nearly US$22 per share. This wide band of opinions reflects sharply different growth assumptions, while ongoing debt repayment and Macau momentum will likely continue to shape the company’s outlook. Inviting you to consider how your signals align with the market’s current optimism and caution.

Explore 6 other fair value estimates on Melco Resorts & Entertainment - why the stock might be worth less than half the current price!

Build Your Own Melco Resorts & Entertainment Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Melco Resorts & Entertainment research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Melco Resorts & Entertainment research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Melco Resorts & Entertainment's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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