Should You Go ‘All-In’ on Wynn

Share price of Wynn Resorts, Limited (NASDAQ:WYNN) rose nearly 8% by 3 pm on January 22, 2018, in the wake of the company reporting last week that its topped analysts’ expectations in fourth-quarter 2017. Is it too late to jump on the opportunity and go “all-in”?

While the share price did surge 10% higher since the quarterly results released last Friday, that usually would be a good opportunity to jump on the momentum, win a few additional rounds and go home counting your profits “when the dealin’s done”. However, prior to the 10% hike over the past two days of trading, the company’s share price was already up 70% over the past 12 months.

Does the Wynn Resorts have the fundamentals to support further share price growth? Perhaps it does.

For fourth-quarter 2017, Wynn Resorts generated $1.69 billion, which was 7.6% higher than analysts’ expectation. More importantly, the company’s $1.49 earnings per share (EPS) beat the $1.38 expectation by 8%. While the news from last week’s report is now built into the share price, the continued robust growth in the Macau market and a potential acceleration of growth in the U.S, market might be enough to support the share price rise for at least a few more quarters.

According to a Barron’s article from a few weeks ago, the gross gaming revenue (GGR) in Macau experienced a healthy growth in 2017. The article’s author, Ben Levisohn, noted that while the market did not grow as much as anticipated, at least it grew. While the overall market rose 19%, the gaming revenue from VIP clients increased 27.6%.

If the trend continues, Wynn Resort’s share price could have more room to grow. Alternatively, investors could consider MGM Resorts International (NYSE:MGM) and Las Vegas Sands (NYSE:LVS).

Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.