Investors with a long-term horizong may find it valuable to assess Melco Resorts & Entertainment Limited’s (NASDAQ:MLCO) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Melco Resorts & Entertainment is currently performing. Check out our latest analysis for Melco Resorts & Entertainment
How MLCO fared against its long-term earnings performance and its industry
For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method enables me to assess different stocks on a similar basis, using the latest information. For Melco Resorts & Entertainment, its latest trailing-twelve-month earnings is US$390.19M, which, against the previous year’s figure, has moved up by an impressive 56.35%. Since these values may be somewhat myopic, I have determined an annualized five-year figure for MLCO’s earnings, which stands at US$366.59M This suggests that, generally, Melco Resorts & Entertainment has been able to gradually improve its net income over the last few years as well.What’s the driver of this growth? Let’s see whether it is only a result of industry tailwinds, or if Melco Resorts & Entertainment has experienced some company-specific growth. Over the past few years, Melco Resorts & Entertainment top-line expansion has outpaced earnings and the growth rate of expenses. Though this has led to a margin contraction, it has cushioned Melco Resorts & Entertainment’s earnings contraction. Scanning growth from a sector-level, the US hospitality industry has been growing its average earnings by double-digit 16.14% over the prior twelve months, and 12.34% over the past half a decade. This shows that whatever tailwind the industry is gaining from, Melco Resorts & Entertainment is capable of leveraging this to its advantage.
What does this mean?
Though Melco Resorts & Entertainment’s past data is helpful, it is only one aspect of my investment thesis. While Melco Resorts & Entertainment has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Melco Resorts & Entertainment to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for MLCO’s future growth? Take a look at our free research report of analyst consensus for MLCO’s outlook.
- Financial Health: Is MLCO’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.