Is Las Vegas Sands Set for Further Gains After 27% Surge and International Expansion News?

• Curious if Las Vegas Sands is actually a bargain hiding in plain sight? You are not alone, especially with so much buzz about its recent performance.
• The stock has rallied an impressive 27.0% over the past month and is up 31.2% in the past year. This hints at shifting growth prospects and changing risk perceptions among investors.
• Recent headlines have spotlighted Las Vegas Sands’ efforts to expand internationally, including developments in its Asian resort operations and new gaming opportunities in the U.S. market. These moves are fueling speculation about what the company’s future growth might look like, which is clearly reflected in the recent price momentum.
• On the valuation front, Las Vegas Sands scores a 4 out of 6 on our value checks, meaning it is considered undervalued in four key areas. Next, we will break down what this valuation score means using several common approaches, but stay tuned for what might be an even smarter way to assess the value of Las Vegas Sands at the end of the article.

Las Vegas Sands delivered 31.2% returns over the last year. See how this stacks up to the rest of the Hospitality industry.

Approach 1: Las Vegas Sands Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model works by estimating how much cash a company will generate in the future, then "discounts" those future projections back to their value in today's dollars. This approach gives a focused look at what a business is truly worth, based on the money it is expected to make.

For Las Vegas Sands, the latest reported Free Cash Flow stands at approximately $1.22 billion. Analysts have provided forecasts up to five years ahead, after which additional projections are extrapolated. According to these estimates, Las Vegas Sands’ annual Free Cash Flow is expected to grow significantly, reaching about $7.82 billion by 2035.

Using a 2 Stage Free Cash Flow to Equity model, the DCF calculation results in an estimated intrinsic value of $133.29 per share. With the current share price trading at a significant discount, roughly 51.8% below this intrinsic value, the analysis suggests Las Vegas Sands stock is undervalued at present.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Las Vegas Sands is undervalued by 51.8%. Track this in your watchlist or portfolio, or discover 919 more undervalued stocks based on cash flows.

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

Approach 2: Las Vegas Sands Price vs Earnings

For profitable companies like Las Vegas Sands, the Price-to-Earnings (PE) ratio is a tried-and-true way to compare a stock price to the business’s actual earnings. Investors favor this metric as it reflects how much the market is willing to pay per dollar of profit, making it easier to weigh value across companies in the same sector.

The “normal” or “fair” PE ratio for a company depends on investors’ expectations around growth, stability, and risk. Higher growth prospects or lower risk will frequently justify a higher PE. In contrast, uncertainty or slower growth leads to a lower ratio being considered fair.

Las Vegas Sands is currently trading at a PE ratio of 27.94x. This sits comfortably above the Hospitality industry average of 20.77x, but is well below its closest listed peers, which average 58.64x. Traditionally, this might suggest Las Vegas Sands is relatively expensive compared to the broad industry, but appears conservative when lined up with peer companies.

To offer a more tailored benchmark, Simply Wall St employs a proprietary “Fair Ratio.” This composite considers a variety of factors, including Las Vegas Sands’ earnings growth trajectory, market cap, profit margins, and relevant industry risks. As a result, it provides a more nuanced valuation yardstick than simply comparing to a sector or group average.

The Fair Ratio for Las Vegas Sands is calculated at 30.02x, only slightly above the company’s actual PE ratio of 27.94x. Since the gap is less than 0.10 in absolute terms, the stock is valued about right based on its underlying fundamentals and risk profile.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1422 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Las Vegas Sands Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply your perspective on a company, a story that connects your assumptions about its future (like revenue growth, profit margins, or expansion plans) to a financial forecast and, ultimately, to what you believe is a fair value for the stock.

On Simply Wall St’s Community page, millions of investors use Narratives as an easy and accessible tool to build and compare these perspectives. Narratives work by letting you set your own expectations for key metrics, tying the business’s story directly to your numbers, and then instantly showing how that view stacks up against the current price. This helps you decide when to buy or sell by highlighting if there is a gap between your Fair Value and the market price.

Best of all, Narratives update dynamically. If Las Vegas Sands posts new earnings or breaking news hits, your Narrative (and resulting valuation) adjust automatically. For example, some investors think Las Vegas Sands is worth as much as $73.5 per share, based on strong growth in Singapore, while others are more cautious and see fair value closer to $50.0, reflecting uncertainties in Macau. Narratives let you make your own call, using your own reasoning, in real time.

Do you think there's more to the story for Las Vegas Sands? Head over to our Community to see what others are saying!

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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