NasdaqGS:MLCO

Stock Analysis Report

Executive Summary

Melco Resorts & Entertainment Limited, through its subsidiaries, develops, owns, and operates casino gaming and entertainment casino resort facilities in Asia.

Rewards

Trading at 21.7% below its fair value

Earnings are forecast to grow 17.31% per year

Earnings grew by 45.3% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Unstable dividend track record



Snowflake Analysis

Proven track record with moderate growth potential.


Similar Companies

Genting Singapore

SGX:G13

Share Price & News

How has Melco Resorts & Entertainment's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: MLCO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.0%

MLCO

-1.9%

US Hospitality

-1.4%

US Market


1 Year Return

23.4%

MLCO

7.7%

US Hospitality

14.5%

US Market

Return vs Industry: MLCO exceeded the US Hospitality industry which returned 7.7% over the past year.

Return vs Market: MLCO exceeded the US Market which returned 14.5% over the past year.


Shareholder returns

MLCOIndustryMarket
7 Day-4.0%-1.9%-1.4%
30 Day-3.4%1.6%1.3%
90 Day0.4%3.0%4.6%
1 Year27.0%23.4%10.5%7.7%17.1%14.5%
3 Year43.0%23.5%31.6%22.6%45.1%35.7%
5 Year9.6%-10.1%45.0%29.7%67.1%48.6%

Price Volatility Vs. Market

How volatile is Melco Resorts & Entertainment's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Melco Resorts & Entertainment undervalued compared to its fair value and its price relative to the market?

21.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MLCO ($21.03) is trading below our estimate of fair value ($26.84)

Significantly Below Fair Value: MLCO is trading below fair value by more than 20%.


Price To Earnings Ratio

Information is not available.

PE vs Market: MLCO is poor value based on its PE Ratio (21.9x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: MLCO is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: MLCO is overvalued based on its PB Ratio (4.2x) compared to the US Hospitality industry average (2.4x).


Next Steps

Future Growth

How is Melco Resorts & Entertainment forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

17.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MLCO's forecast earnings growth (17.3% per year) is above the savings rate (1.7%).

Earnings vs Market: MLCO's earnings (17.3% per year) are forecast to grow faster than the US market (14.2% per year).

High Growth Earnings: MLCO's earnings are forecast to grow, but not significantly.

Revenue vs Market: MLCO's revenue (5% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: MLCO's revenue (5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MLCO's Return on Equity is forecast to be high in 3 years time (22.8%)


Next Steps

Past Performance

How has Melco Resorts & Entertainment performed over the past 5 years?

-2.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MLCO has high quality earnings.

Growing Profit Margin: MLCO's current net profit margins (7.8%) are higher than last year (6%).


Past Earnings Growth Analysis

Earnings Trend: MLCO's earnings have declined by -2.2% per year over the past 5 years.

Accelerating Growth: MLCO's earnings growth over the past year (45.3%) exceeds its 5-year average (-2.2% per year).

Earnings vs Industry: MLCO earnings growth over the past year (45.3%) exceeded the Hospitality industry -16.7%.


Return on Equity

High ROE: MLCO's Return on Equity (14.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Melco Resorts & Entertainment's financial position?


Financial Position Analysis

Short Term Liabilities: MLCO's short term assets ($2.3B) do not cover its short term liabilities ($2.5B).

Long Term Liabilities: MLCO's short term assets ($2.3B) do not cover its long term liabilities ($4.3B).


Debt to Equity History and Analysis

Debt Level: MLCO's debt to equity ratio (155%) is considered high.

Reducing Debt: MLCO's debt to equity ratio has increased from 76.2% to 155% over the past 5 years.

Debt Coverage: MLCO's debt is well covered by operating cash flow (22.3%).

Interest Coverage: MLCO's interest payments on its debt are not well covered by EBIT (2.7x coverage).


Balance Sheet

Inventory Level: MLCO has a high level of physical assets or inventory.

Debt Coverage by Assets: MLCO's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

What is Melco Resorts & Entertainment's current dividend yield, its reliability and sustainability?

3.14%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%1.4%markettop25%3.7%industryaverage3.1%forecastin3Years3.5%

Current dividend yield vs market & industry

Notable Dividend: MLCO's dividend (3.14%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: MLCO's dividend (3.14%) is low compared to the top 25% of dividend payers in the US market (3.71%).


Stability and Growth of Payments

Stable Dividend: MLCO has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: MLCO's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (66.8%), MLCO's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MLCO's dividends in 3 years are forecast to be covered by earnings (67.2% payout ratio).


Next Steps

Management

What is the CEO of Melco Resorts & Entertainment's salary, the management and board of directors tenure and is there insider trading?

9.8yrs

Average management tenure


CEO

Lawrence Ho (42yo)

15yrs

Tenure

0

Mr. Yau Lung Ho, also known as Lawrence, has been Executive Director of Melco Resorts & Entertainment Limited (formerly known as, Melco Crown Entertainment Limited) since December 20, 2004 and served as th ...


CEO Compensation Analysis

Compensation vs Market: Lawrence's total compensation ($USD0.00) is below average for companies of similar size in the US market ($USD6.81M).

Compensation vs Earnings: Lawrence's compensation has been consistent with company performance over the past year.


Management Age and Tenure

9.8yrs

Average Tenure

52yo

Average Age

Experienced Management: MLCO's management team is seasoned and experienced (9.8 years average tenure).


Board Age and Tenure

13.0yrs

Average Tenure

47yo

Average Age

Experienced Board: MLCO's board of directors are seasoned and experienced ( 13 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Lawrence Ho (42yo)

    Founder

    • Tenure: 15yrs
  • Frederic Jean-Marie Winckler (52yo)

    Executive VP and Chief Creative & Brand Officer

    • Tenure: 0.9yrs
  • Stephanie Cheung (57yo)

    Executive VP

    • Tenure: 11yrs
  • Maggie Ma

    Chief Government Affairs Officer

    • Tenure: 0yrs
  • Akiko Takahashi (66yo)

    Executive VP & Chief Human Resources/Corporate Social Responsibility Officer

    • Tenure: 13yrs
  • Evan Winkler (44yo)

    President & Director

    • Tenure: 3.3yrs
  • Geoffrey Stuart Davis (50yo)

    Executive VP & CFO

    • Tenure: 8.7yrs
  • Richard Huang

    Director of Investor Relations

    • Tenure: 0yrs
  • Jaya Jesudason (77yo)

    Executive Vice President of Construction & Design

    • Tenure: 0yrs
  • Chimmy Leung

    Executive Director of Corporate Communications

    • Tenure: 0yrs

Board Members

  • Francesca Galante (43yo)

    Independent Non-Executive Director

    • Tenure: 1.3yrs
  • Alec Tsui (69yo)

    Independent Non-Executive Director

    • Tenure: 13yrs
    • Compensation: US$559.00k
  • Lawrence Ho (42yo)

    Founder

    • Tenure: 15yrs
  • Thomas Wu (47yo)

    Independent Non-Executive Director

    • Tenure: 13yrs
    • Compensation: US$232.00k
  • John William Crawford (77yo)

    Independent Non-Executive Director

    • Tenure: 2.9yrs
  • Clarence Chung (56yo)

    Non-Executive Director

    • Tenure: 13.1yrs
    • Compensation: US$1.26m
  • Evan Winkler (44yo)

    President & Director

    • Tenure: 3.3yrs

Company Information

Melco Resorts & Entertainment Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Melco Resorts & Entertainment Limited
  • Ticker: MLCO
  • Exchange: NasdaqGS
  • Founded: 2004
  • Industry: Casinos and Gaming
  • Sector: Consumer Services
  • Market Cap: US$9.580b
  • Shares outstanding: 459.92m
  • Website: https://www.melco-resorts.com

Number of Employees


Location

  • Melco Resorts & Entertainment Limited
  • The Centrium
  • 36th Floor
  • Central
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
MLCONasdaqGS (Nasdaq Global Select)YesSPON ADR EACH REP 3 ORD SHSUSUSDDec 2006
MASDB (Deutsche Boerse AG)YesSPON ADR EACH REP 3 ORD SHSDEEURDec 2006
MLCO NBMV (Bolsa Mexicana de Valores)YesSPON ADR EACH REP 3 ORD SHSMXMXNDec 2006

Biography

Melco Resorts & Entertainment Limited, through its subsidiaries, develops, owns, and operates casino gaming and entertainment casino resort facilities in Asia. It owns and operates City of Dreams, an integ ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/06 00:03
End of Day Share Price2019/12/05 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.