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.


Snowflake Analysis

Reasonable growth potential and fair value.


Similar Companies

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

-4.9%

MLCO

-1.6%

US Hospitality

-1.1%

US Market


1 Year Return

-14.2%

MLCO

4.1%

US Hospitality

17.9%

US Market

Return vs Industry: MLCO underperformed the US Hospitality industry which returned 4.1% over the past year.

Return vs Market: MLCO underperformed the US Market which returned 17.9% over the past year.


Shareholder returns

MLCOIndustryMarket
7 Day-4.9%-1.6%-1.1%
30 Day-4.1%-1.4%1.4%
90 Day-8.0%3.2%6.9%
1 Year-11.7%-14.2%6.8%4.1%20.3%17.9%
3 Year35.2%26.8%33.5%24.6%47.8%38.3%
5 Year3.3%-15.2%45.0%29.6%71.9%53.0%

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?

43.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MLCO ($20.36) is trading below our estimate of fair value ($36.11)

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


Price To Earnings Ratio

PE vs Industry: MLCO is poor value based on its PE Ratio (26.1x) compared to the Hospitality industry average (24.2x).

PE vs Market: MLCO is poor value based on its PE Ratio (26.1x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: MLCO is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: MLCO is overvalued based on its PB Ratio (4x) compared to the US Hospitality industry average (2.2x).


Next Steps

Future Growth

How is Melco Resorts & Entertainment forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

27.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MLCO's forecast earnings growth (27.8% per year) is above the savings rate (1.7%).

Earnings vs Market: MLCO's earnings (27.8% per year) are forecast to grow faster than the US market (14.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: MLCO's revenue (4.5% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: MLCO's revenue (4.5% 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 (23%)


Next Steps

Past Performance

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

6.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MLCO has high quality earnings.

Growing Profit Margin: MLCO's current net profit margins (6.5%) are lower than last year (6.8%).


Past Earnings Growth Analysis

Earnings Trend: MLCO's earnings have grown by 6.8% per year over the past 5 years.

Accelerating Growth: MLCO's earnings growth over the past year (6.2%) is below its 5-year average (6.8% per year).

Earnings vs Industry: MLCO earnings growth over the past year (6.2%) exceeded the Hospitality industry -8.2%.


Return on Equity

High ROE: MLCO's Return on Equity (12.5%) 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 ($1.9B) exceed its short term liabilities ($1.5B).

Long Term Liabilities: MLCO's short term assets ($1.9B) do not cover its long term liabilities ($4.8B).


Debt to Equity History and Analysis

Debt Level: MLCO's debt to equity ratio (139.8%) is considered high.

Reducing Debt: MLCO's debt to equity ratio has increased from 77.4% to 139.8% over the past 5 years.

Debt Coverage: MLCO's debt is well covered by operating cash flow (24%).

Interest Coverage: MLCO's interest payments on its debt are not well covered by EBIT (2.5x 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 0.4x debt).


Next Steps

Dividend

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

3.24%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Melco Resorts & Entertainment before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.2%marketbottom25%1.4%markettop25%3.7%industryaverage3.1%forecastin3Years3.6%

Current dividend yield vs market & industry

Notable Dividend: MLCO's dividend (3.24%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: MLCO's dividend (3.24%) is low compared to the top 25% of dividend payers in the US market (3.73%).


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: At its current payout ratio (83.5%), MLCO's 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 (52.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

10.0yrs

Average management tenure


CEO

Lawrence Ho (42yo)

15.2yrs

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 ($USD0.00) is below average for companies of similar size in the US market ($USD6.39M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Yau Lung Ho
Founder15.2yrsno data0.63% $58.7m
Evan Winkler
President & Director3.5yrsno datano data
Geoffrey Stuart Davis
Executive VP & CFO8.8yrsno datano data
Richard Huang
Director of Investor Relations0yrsno datano data
Stephanie Cheung
Executive VP11.2yrsno datano data
Chimmy Leung
Executive Director of Corporate Communications0yrsno datano data
Akiko Takahashi
Executive VP & Chief Human Resources/Corporate Social Responsibility Officer13.2yrsno datano data
Maggie Ma
Chief Government Affairs Officer0yrsno datano data
Jaya Jesudason
Executive Vice President of Construction & Design0yrsno datano data
Frederic Jean-Marie Winckler
Executive VP and Chief Creative & Brand Officer1.1yrsno datano data

10.0yrs

Average Tenure

52yo

Average Age

Experienced Management: MLCO's management team is seasoned and experienced (10 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Yau Lung Ho
Founder15.2yrsno data0.63% $58.7m
Evan Winkler
President & Director3.5yrsno datano data
Francesca Galante
Independent Non-Executive Director1.4yrsno datano data
Yiu Wa Tsui
Independent Non-Executive Director13.2yrsUS$559.00kno data
Jefferson Wu
Independent Non-Executive Director13.2yrsUS$232.00kno data
John William Crawford
Independent Non-Executive Director3.1yrsno datano data
Yuk Man Chung
Non-Executive Director13.3yrsUS$1.26mno data

13.2yrs

Average Tenure

47yo

Average Age

Experienced Board: MLCO's board of directors are seasoned and experienced ( 13.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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.


Top Shareholders

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$9.364b
  • 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)YesADRUSUSDDec 2006
MASDB (Deutsche Boerse AG)YesADRDEEURDec 2006
MLCO NBMV (Bolsa Mexicana de Valores)YesADRMXMXNDec 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 integrated casino resort that has approximately 476 gaming tables and approximately 724 gaming machines; approximately 2,170 hotel rooms and suites; a wet stage performance theater with approximately 2,000 seats; approximately 25 restaurants and bars, approximately 165 retail outlets; and health and fitness clubs, 3 swimming pools, spa and salons, and banquet and meeting facilities. The company also operates Altira Macau, a casino hotel, which has approximately 104 gaming tables and 129 gaming machines; 230 hotel rooms; various dining and casual restaurants, and recreation and leisure facilities; and various non-gaming amenities comprising spa, gymnasium, outdoor garden podium, and sky terrace lounge. In addition, it operates Studio City, a cinematically-themed integrated entertainment, retail, and gaming resort that comprises 292 gaming tables and 957 gaming machines in Cotai, Macau. Further, the company owns and operates 8 Mocha Clubs with 1,336 gaming machines, as well as Grand Dragon casino in Taipa Island, Macau. Additionally, it operates and manages City of Dreams Manila, a casino, hotel, retail, and entertainment integrated resort in the Entertainment City complex in Manila. The company was formerly known as Melco Crown Entertainment Limited and changed its name to Melco Resorts & Entertainment Limited in April 2017. The company was incorporated in 2004 and is based in Central, Hong Kong. Melco Resorts & Entertainment Limited is a subsidiary of Melco Leisure and Entertainment Group Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 00:41
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.