How Should Investors Value Wynn After Stock Soars and CEO Hints at New Macau Projects?

If you have ever stood at the crossroads wondering what to do with Wynn Resorts stock, you are not alone. It has been a wild ride for shareholders, especially over the past year. With a year-to-date return of 59.1% and a 30.7% gain over the last twelve months, Wynn Resorts has certainly rewarded patient investors. Even over the last five years, the stock has more than doubled, climbing 84.2%. Recent weeks have not been dull either. In the past 7 and 30 days alike, Wynn’s stock advanced around 6%, suggesting renewed optimism or perhaps a noticeable shift in how the market perceives its risk and growth profile.

So, what is behind all this excitement? Recent market developments and changing expectations within the broader hospitality and resort sectors have played a role. Investors are looking for companies with staying power and potential for post-pandemic growth, and Wynn’s global brand continues to attract attention. However, as with any stock that has delivered strong returns, the big question now is whether Wynn Resorts still represents good value, or if the rally has pushed the shares into pricey territory.

On a valuation scorecard, Wynn Resorts currently checks in at 0 out of 6 for undervalued criteria, meaning it does not screen as undervalued by any of the traditional metrics. But valuation is more art than science, and to really decide what to do next, we will need to dig into these different valuation approaches. Plus, there is an even more revealing way to look at Wynn’s value. This is something you will not want to miss at the end of this article.

Wynn Resorts scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Wynn Resorts Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company's value by projecting its future cash flows and discounting them back to today. This approach helps investors understand what those future dollars are worth in today’s terms, capturing both the company’s earning power and the time value of money.

For Wynn Resorts, the DCF model starts with recent free cash flow (FCF) of $798.5 million. Analysts expect FCF to reach $1.05 billion by the end of 2024. Looking further ahead, Simply Wall St projects free cash flow figures over the next decade, with 2035’s estimate at $831.7 million. These long-range projections rely increasingly on extrapolation rather than direct analyst estimates.

After discounting all future cash flows to today’s dollars, Wynn Resorts’ estimated intrinsic value is $81.86 per share. Compared to its current market price, the DCF analysis reveals that the stock is trading at a 62.9% premium to fair value. This indicates that the stock is significantly overvalued on this metric.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Wynn Resorts.

Our Discounted Cash Flow (DCF) analysis suggests Wynn Resorts may be overvalued by 62.9%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Wynn Resorts Price vs Earnings

The Price-to-Earnings (PE) ratio is often considered the go-to valuation multiple for profitable companies like Wynn Resorts because it directly relates a company’s market price to its earnings power. A higher PE can reflect higher growth expectations, while a lower PE often signals slower growth or increased risk. Factors such as market volatility, company size, earnings stability, and sector outlook all influence what counts as a "normal" or "fair" PE ratio for any business.

Currently, Wynn Resorts trades at a PE ratio of 35.8x. This figure is nearly identical to the average for its direct peers, which is 35.7x, and stands noticeably above the hospitality industry average of 24.4x. In simple terms, the market is pricing Wynn’s earnings at a premium when compared to the wider sector, likely reflecting higher anticipated growth or perceived stability.

Simply Wall St’s proprietary Fair Ratio for Wynn Resorts is 27.0x. Unlike basic comparisons to industry averages or peers, the Fair Ratio incorporates a more tailored assessment, factoring in Wynn’s own growth outlook, risk profile, profit margins, and market cap. This provides retail investors with a more meaningful benchmark for deciding whether shares are over- or undervalued, rather than relying solely on averages that may not account for the company’s unique position.

Comparing Wynn’s current PE of 35.8x against its Fair Ratio of 27.0x suggests the stock is trading at a notable premium. While growth prospects could justify some of this, the difference signals that investors are paying more than what would typically be expected for Wynn’s particular characteristics.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Wynn Resorts Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is your personal story about Wynn Resorts. It connects your unique perspective about its future (like where revenue, profits, and margins are headed) to a detailed financial forecast, and ultimately, to your own calculation of fair value. Narratives help you see the numbers in context and make sense of what is really driving the business, whether you believe in a luxury resorts boom or see risks outweighing the upside.

With the Narratives tool on Simply Wall St’s Community page, millions of investors share and update their views. This makes it easy to find, build, or track different investment opinions. Narratives show how your assumptions translate into a fair value today compared with the current price, helping you decide whether shares are attractive or not. As new events, news, or earnings are announced, Narratives update automatically, so your valuation always reflects the latest reality.

For Wynn Resorts, one investor might craft a bullish Narrative, projecting high revenue growth and premium margins from global luxury expansion, resulting in a fair value near $147.00 per share. Another could be more cautious, citing Macau risks and industry competition to justify a much lower fair value around $110.00. Whichever story you lean toward, Narratives let you invest with clarity and confidence.

Do you think there's more to the story for Wynn Resorts? Create your own Narrative to let the Community know!

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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