Wynn Resorts Ltd Valuation – March 2019 #WYNN

Company Profile (excerpt from Reuters): Wynn Resorts, Limited (Wynn Resorts), incorporated on June 3, 2002, is a developer, owner and operator of destination casino resorts that integrate accommodations and a range of amenities, including dining outlets, retail offerings, entertainment theaters and meeting complexes. The Company’s segments include Macau Operations and Las Vegas Operations. The Company’s Macau Operations include Wynn Macau and Wynn Palace. It also includes Encore, an expansion at Wynn Macau. The Company’s Las Vegas Operations include Wynn Las Vegas and Encore, an expansion at Wynn Las Vegas. The Company is constructing Wynn Boston Harbor, an integrated casino resort in Everett, Massachusetts.

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of WYNN – March 2019

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $12,583,608,244 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.40 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 65.15% Pass
6. Moderate PEmg Ratio PEmg < 20 22.62 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 6.96 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.40 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 12.39 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

 

Stage 2: Determination of Intrinsic Value

EPSmg $5.17
MG Growth Estimate 0.64%
MG Value $50.54
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $74.94
MG Value based on 0% Growth $43.93
Market Implied Growth Rate 7.06%
Current Price $116.91
% of Intrinsic Value 231.33%

Wynn Resorts, Limited does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $4.96 in 2015 to an estimated $5.17 for 2019. This level of demonstrated earnings growth does not support the market’s implied estimate of 7.06% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Wynn Resorts, Limited revealed the company was trading above its Graham Number of $48.2. The company pays a dividend of $2.75 per share, for a yield of 2.4%, putting it among the best dividend paying stocks today. Its PEmg (price over earnings per share – ModernGraham) was 22.62, which was above the industry average of 20.7. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-81.14.

Wynn Resorts, Limited scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$81.14
Graham Number $48.20
PEmg 22.62
Current Ratio 1.40
PB Ratio 6.96
Current Dividend $2.75
Dividend Yield 2.35%
Number of Consecutive Years of Dividend Growth 1

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2018
Total Current Assets $2,641,376,000
Total Current Liabilities $1,882,063,000
Long-Term Debt $9,411,140,000
Total Assets $13,216,269,000
Intangible Assets $222,506,000
Total Liabilities $11,401,480,000
Shares Outstanding (Diluted Average) 107,965,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $5.52
Dec2018 $5.35
Dec2017 $7.28
Dec2016 $2.38
Dec2015 $1.92
Dec2014 $7.18
Dec2013 $7.17
Dec2012 $4.82
Dec2011 $4.88
Dec2010 $1.29
Dec2009 $0.17
Dec2008 $1.92
Dec2007 $1.80
Dec2006 $6.24
Dec2005 -$0.92
Dec2004 -$2.35
Dec2003 -$0.50
Dec2002 -$0.68
Dec2001 -$0.45
Dec2000 -$0.28

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $5.17
Dec2018 $4.94
Dec2017 $4.88
Dec2016 $4.02
Dec2015 $4.96
Dec2014 $6.01
Dec2013 $4.83
Dec2012 $3.32
Dec2011 $2.38
Dec2010 $1.52
Dec2009 $1.70
Dec2008 $2.09
Dec2007 $1.73
Dec2006 $1.25
Dec2005 -$1.15
Dec2004 -$1.13
Dec2003 -$0.48

Recommended Reading:

Other ModernGraham posts about the company

Wynn Resorts Ltd Valuation – June 2018 $WYNN
Wynn Resorts Ltd Valuation – March 2017 $WYNN
Wynn Resorts Limited Valuation – August 2016 $WYNN
15 Best Stocks For Value Investors This Week – 2/13/16
Wynn Resorts Ltd Valuation – February 2016 $WYNN

Other ModernGraham posts about related companies

MGM Resorts International Valuation – January 2019 $MGM
Scientific Games Corp Valuation – July 2018 $SGMS
Wynn Resorts Ltd Valuation – June 2018 $WYNN
MGM Resorts International Valuation – Initial Coverage $MGM
Wynn Resorts Ltd Valuation – March 2017 $WYNN
Intertain Group Corp Valuation – Initial Coverage $TSE:IT
Scientific Games Corp Valuation – Initial Coverage $SGMS
Wynn Resorts Limited Valuation – August 2016 $WYNN
Wynn Resorts Ltd Valuation – February 2016 $WYNN
Wynn Resorts Limited Analysis – September 2015 Update $WYNN

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Wynn Resorts Ltd Valuation – June 2018 $WYNN

Company Profile (excerpt from Reuters): Wynn Resorts, Limited (Wynn Resorts), incorporated on June 3, 2002, is a developer, owner and operator of destination casino resorts that integrate accommodations and a range of amenities, including dining outlets, retail offerings, entertainment theaters and meeting complexes. The Company’s segments include Macau Operations and Las Vegas Operations. The Company’s Macau Operations include Wynn Macau and Wynn Palace. It also includes Encore, an expansion at Wynn Macau. The Company’s Las Vegas Operations include Wynn Las Vegas and Encore, an expansion at Wynn Las Vegas. The Company is constructing Wynn Boston Harbor, an integrated casino resort in Everett, Massachusetts.

WYNN Chart

WYNN data by YCharts

 

Downloadable PDF version of this valuation:

ModernGraham Valuation of WYNN – June 2018

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $19,634,715,878 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 1.17 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 164.67% Pass
6. Moderate PEmg Ratio PEmg < 20 32.73 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 24.04 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 1.17 Fail
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 26.43 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

 

Stage 2: Determination of Intrinsic Value

EPSmg $5.53
MG Growth Estimate -1.20%
MG Value $33.70
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $80.12
MG Value based on 0% Growth $46.97
Market Implied Growth Rate 12.11%
Current Price $180.82
% of Intrinsic Value 536.57%

Wynn Resorts, Limited does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the low current ratio, poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the current assets, and the lack of earnings growth over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $6.01 in 2014 to an estimated $5.53 for 2018. This level of demonstrated earnings growth does not support the market’s implied estimate of 12.11% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Wynn Resorts, Limited revealed the company was trading above its Graham Number of $38.39. The company pays a dividend of $2 per share, for a yield of 1.1% Its PEmg (price over earnings per share – ModernGraham) was 32.73, which was below the industry average of 38.18, which by some methods of valuation makes it one of the most undervalued stocks in its industry. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-87.7.

Wynn Resorts, Limited scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$87.70
Graham Number $38.39
PEmg 32.73
Current Ratio 1.17
PB Ratio 24.04
Current Dividend $2.00
Dividend Yield 1.11%
Number of Consecutive Years of Dividend Growth 0

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 3/1/2018
Total Current Assets $2,448,299,000
Total Current Liabilities $2,098,909,000
Long-Term Debt $9,234,679,000
Total Assets $12,215,174,000
Intangible Assets $212,384,000
Total Liabilities $11,443,786,000
Shares Outstanding (Diluted Average) 102,570,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $7.12
Dec2017 $7.28
Dec2016 $2.38
Dec2015 $1.92
Dec2014 $7.18
Dec2013 $7.17
Dec2012 $4.82
Dec2011 $4.88
Dec2010 $1.29
Dec2009 $0.17
Dec2008 $1.92
Dec2007 $1.80
Dec2006 $6.24
Dec2005 -$0.92
Dec2004 -$2.35
Dec2003 -$0.50
Dec2002 -$0.68
Dec2001 -$0.45
Dec2000 -$0.28

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $5.53
Dec2017 $4.88
Dec2016 $4.02
Dec2015 $4.96
Dec2014 $6.01
Dec2013 $4.83
Dec2012 $3.32
Dec2011 $2.38
Dec2010 $1.52
Dec2009 $1.70
Dec2008 $2.09
Dec2007 $1.73
Dec2006 $1.25
Dec2005 -$1.15
Dec2004 -$1.13
Dec2003 -$0.48
Dec2002 -$0.40

Recommended Reading:

Other ModernGraham posts about the company

Wynn Resorts Ltd Valuation – March 2017 $WYNN
Wynn Resorts Limited Valuation – August 2016 $WYNN
15 Best Stocks For Value Investors This Week – 2/13/16
Wynn Resorts Ltd Valuation – February 2016 $WYNN
15 Best Stocks For Value Investors This Week – 9/12/15

Other ModernGraham posts about related companies

MGM Resorts International Valuation – Initial Coverage $MGM
Wynn Resorts Ltd Valuation – March 2017 $WYNN
Intertain Group Corp Valuation – Initial Coverage $TSE:IT
Scientific Games Corp Valuation – Initial Coverage $SGMS
Wynn Resorts Limited Valuation – August 2016 $WYNN
Wynn Resorts Ltd Valuation – February 2016 $WYNN
Wynn Resorts Limited Analysis – September 2015 Update $WYNN
Wyndham Worldwide Corporation Analysis – August 2015 Update $WYN
Wynn Resorts Analysis – June 2015 Update $WYNN
International Game Technology Quarterly Valuation – March 2015 $IGT

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Wynn Resorts Ltd Valuation – March 2017 $WYNN

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Stocks for Using A Benjamin Graham Value Investing Strategy – February 2017.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Wynn Resorts Ltd (WYNN) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Wynn Resorts, Limited is a developer, owner and operator of destination casino resorts that integrate accommodations and a range of amenities, including dining outlets, retail offerings, entertainment theaters and meeting complexes. The Company operates through two segments: Macau Operations and Las Vegas Operations. In Macau, it owns interest in Wynn Macau, Limited and operates Wynn Macau and Encore at Wynn Macau. Its integrated Macau resort of Wynn Macau and Encore at Wynn Macau features approximately 284,000 square feet of casino space with over 460 table games and over 710 slot machines. In Las Vegas, Nevada, it owns and operates Wynn Las Vegas and Encore at Wynn Las Vegas. Its integrated Las Vegas resort of Wynn Las Vegas and Encore at Wynn Las Vegas features approximately 186,000 square feet of casino space with over 230 table games and approximately 1,870 slot machines. In addition, the Company is developing an integrated casino resort in Everett, Massachusetts.

WYNN Chart

WYNN data by YCharts

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Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Recent valuations of the components of the Dow Jones Industrial Average are available for free members, including this one of Microsoft Corporation.  In addition, here is a post detailing what can be found within each individual company’s valuation.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of WYNN – March 2017

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $10,040,823,284 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.11 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 118.05% Pass
6. Moderate PEmg Ratio PEmg < 20 28.40 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 63.67 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.11 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 6.43 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Fail

Stage 2: Determination of Intrinsic Value

EPSmg $3.48
MG Growth Estimate -4.21%
MG Value $0.27
Opinion Overvalued
MG Grade D
MG Value based on 3% Growth $50.42
MG Value based on 0% Growth $29.56
Market Implied Growth Rate 9.95%
Current Price $98.74
% of Intrinsic Value 36641.08%

Wynn Resorts, Limited does not satisfy the requirements of either the Enterprising Investor or the more conservative Defensive Investor. The Defensive Investor is concerned with the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor has concerns regarding the level of debt relative to the net current assets, and the lack of earnings growth over the last five years. As a result, all value investors following the ModernGraham approach should explore other opportunities at this time or proceed cautiously with a speculative attitude.

As for a valuation, the company appears to be Overvalued after seeing its EPSmg (normalized earnings) decline from $4.83 in 2013 to an estimated $3.48 for 2017. This level of demonstrated earnings growth does not support the market’s implied estimate of 9.95% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Wynn Resorts, Limited revealed the company was trading above its Graham Number of $10.35. The company pays a dividend of $2 per share, for a yield of 2% Its PEmg (price over earnings per share – ModernGraham) was 28.4, which was above the industry average of 22.59. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-86.45.

Wynn Resorts, Limited scores quite poorly in the ModernGraham grading system, with an overall grade of D.

Stage 3: Information for Further Research

Net Current Asset Value (NCAV) -$86.45
Graham Number $10.35
PEmg 28.40
Current Ratio 2.11
PB Ratio 63.67
Current Dividend $2.00
Dividend Yield 2.03%
Number of Consecutive Years of Dividend Growth 0

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 12/1/2016
Total Current Assets $2,990,367,000
Total Current Liabilities $1,416,301,000
Long-Term Debt $10,125,352,000
Total Assets $11,953,557,000
Intangible Assets $113,588,000
Total Liabilities $11,795,608,000
Shares Outstanding (Diluted Average) 101,855,000

Earnings Per Share History

EPS History
Next Fiscal Year Estimate $3.07
Dec2016 $2.38
Dec2015 $1.92
Dec2014 $7.18
Dec2013 $7.17
Dec2012 $4.82
Dec2011 $4.88
Dec2010 $1.29
Dec2009 $0.17
Dec2008 $1.92
Dec2007 $1.80
Dec2006 $6.24
Dec2005 -$0.92
Dec2004 -$2.35
Dec2003 -$0.50
Dec2002 -$0.68
Dec2001 -$0.45
Dec2000 -$0.28

Earnings Per Share – ModernGraham History

EPSmg History
Next Fiscal Year Estimate $3.48
Dec2016 $4.02
Dec2015 $4.96
Dec2014 $6.01
Dec2013 $4.83
Dec2012 $3.32
Dec2011 $2.38
Dec2010 $1.52
Dec2009 $1.70
Dec2008 $2.09
Dec2007 $1.73
Dec2006 $1.25
Dec2005 -$1.15
Dec2004 -$1.13
Dec2003 -$0.48
Dec2002 -$0.40
Dec2001 -$0.22

Recommended Reading:

Other ModernGraham posts about the company

Wynn Resorts Limited Valuation – August 2016 $WYNN
15 Best Stocks For Value Investors This Week – 2/13/16
Wynn Resorts Ltd Valuation – February 2016 $WYNN
15 Best Stocks For Value Investors This Week – 9/12/15
Wynn Resorts Limited Analysis – September 2015 Update $WYNN

Other ModernGraham posts about related companies

Intertain Group Corp Valuation – Initial Coverage $TSE:IT
Scientific Games Corp Valuation – Initial Coverage $SGMS
Wynn Resorts Limited Valuation – August 2016 $WYNN
Wynn Resorts Ltd Valuation – February 2016 $WYNN
Wynn Resorts Limited Analysis – September 2015 Update $WYNN
Wyndham Worldwide Corporation Analysis – August 2015 Update $WYN
Wynn Resorts Analysis – June 2015 Update $WYNN
International Game Technology Quarterly Valuation – March 2015 $IGT
Wynn Resorts Limited Quarterly Valuation – March 2015 $WYNN
Wynn Resorts Limited Quarterly Valuation – December 2014 $WYNN

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Wynn Resorts Limited Valuation – August 2016 $WYNN

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Companies Benjamin Graham Would Invest In Today – July 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Wynn Resorts Limited (WYNN) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Wynn Resorts, Limited is a developer, owner and operator of destination casino resorts that integrate accommodations and a range of amenities, including dining outlets, retail offerings, entertainment theaters and meeting complexes. The Company operates through two segments: Macau Operations and Las Vegas Operations. In Macau, it owns interest in Wynn Macau, Limited and operates Wynn Macau and Encore at Wynn Macau. Its integrated Macau resort of Wynn Macau and Encore at Wynn Macau features approximately 284,000 square feet of casino space with over 460 table games and over 710 slot machines. In Las Vegas, Nevada, it owns and operates Wynn Las Vegas and Encore at Wynn Las Vegas. Its integrated Las Vegas resort of Wynn Las Vegas and Encore at Wynn Las Vegas features approximately 186,000 square feet of casino space with over 230 table games and approximately 1,870 slot machines. In addition, the Company is developing an integrated casino resort in Everett, Massachusetts.

WYNN Chart

WYNN data by YCharts

[level-free]
To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
[not-level-free]

Downloadable PDF version of this valuation:

ModernGraham Valuation of WYNN – August 2016

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $10,736,580,236 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.43 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 199.49% Pass
6. Moderate PEmg Ratio PEmg < 20 24.89 Fail
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 -148.49 Fail
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.43 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 6.65 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

WYNN value chart August 2016

EPSmg $4.08
MG Growth Estimate 3.43%
MG Value $62.61
Opinion Overvalued
MG Grade C-
MG Value based on 3% Growth $59.09
MG Value based on 0% Growth $34.64
Market Implied Growth Rate 8.19%
Current Price $101.42
% of Intrinsic Value 162.00%

Wynn Resorts, Limited is suitable for the Enterprising Investor but not the more conservative Defensive Investor. The Defensive Investor is concerned with the poor dividend history, and the high PEmg and PB ratios. The Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors following the ModernGraham approach should feel comfortable proceeding with the analysis.

As for a valuation, the company appears to be Overvalued after growing its EPSmg (normalized earnings) from $3.32 in 2012 to an estimated $4.08 for 2016. This level of demonstrated earnings growth does not support the market’s implied estimate of 8.19% annual earnings growth over the next 7-10 years. As a result, the ModernGraham valuation model, based on the Benjamin Graham value investing formula, returns an estimate of intrinsic value below the price.

At the time of valuation, further research into Wynn Resorts, Limited revealed the company was trading above its Graham Number of $0. The company pays a dividend of $2 per share, for a yield of 2% Its PEmg (price over earnings per share – ModernGraham) was 24.89, which was above the industry average of 20.49. Finally, the company was trading above its Net Current Asset Value (NCAV) of $-81.13.

Wynn Resorts, Limited receives an average overall rating in the ModernGraham grading system, scoring a C-.

Stage 3: Information for Further Research

WYNN charts August 2016

Net Current Asset Value (NCAV) -$81.13
Graham Number $0.00
PEmg 24.89
Current Ratio 2.43
PB Ratio -148.49
Current Dividend $2.00
Dividend Yield 1.97%
Number of Consecutive Years of Dividend Growth 0

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information 6/1/2016
Total Current Assets $2,414,543,000
Total Current Liabilities $991,937,000
Long-Term Debt $9,457,016,000
Total Assets $10,610,351,000
Intangible Assets $114,780,000
Total Liabilities $10,679,936,000
Shares Outstanding (Diluted Average) 101,881,000

Earnings Per Share History

Next Fiscal Year Estimate $2.55
Dec2015 $1.92
Dec2014 $7.18
Dec2013 $7.17
Dec2012 $4.82
Dec2011 $4.88
Dec2010 $1.29
Dec2009 $0.17
Dec2008 $1.92
Dec2007 $1.80
Dec2006 $6.24
Dec2005 -$0.92
Dec2004 -$2.35
Dec2003 -$0.50
Dec2002 -$0.68
Dec2001 -$0.45
Dec2000 -$0.28

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $4.08
Dec2015 $4.96
Dec2014 $6.01
Dec2013 $4.83
Dec2012 $3.32
Dec2011 $2.38
Dec2010 $1.52
Dec2009 $1.70
Dec2008 $2.09
Dec2007 $1.73
Dec2006 $1.25
Dec2005 -$1.15
Dec2004 -$1.13
Dec2003 -$0.48
Dec2002 -$0.40
Dec2001 -$0.22
Dec2000 -$0.09

Recommended Reading:

Other ModernGraham posts about the company

15 Best Stocks For Value Investors This Week – 2/13/16
Wynn Resorts Ltd Valuation – February 2016 $WYNN
15 Best Stocks For Value Investors This Week – 9/12/15
15 Best Stocks For Value Investors This Week – 9/12/15
Wynn Resorts Limited Analysis – September 2015 Update $WYNN

Other ModernGraham posts about related companies

Wynn Resorts Ltd Valuation – February 2016 $WYNN
Wynn Resorts Limited Analysis – September 2015 Update $WYNN
Wynn Resorts Limited Analysis – September 2015 Update $WYNN
Wyndham Worldwide Corporation Analysis – August 2015 Update $WYN
Wynn Resorts Analysis – June 2015 Update $WYNN
International Game Technology Quarterly Valuation – March 2015 $IGT
Wynn Resorts Limited Quarterly Valuation – March 2015 $WYNN
Wynn Resorts Limited Quarterly Valuation – December 2014 $WYNN
Wynn Resorts Limited Quarterly Stock Valuation – September 2014 $WYNN

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Wynn Resorts Ltd Valuation – February 2016 $WYNN

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Companies Benjamin Graham Would Invest In Today – February 2016.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Wynn Resorts Ltd (WYNN) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Wynn Resorts, Limited is a developer, owner and operator of destination casino resorts which integrate accommodations and amenities, including fine dining, premium retail offerings, distinctive entertainment and convention facilities. The Company owns 72% of Wynn Macau, Limited, which operates an integrated resort in the Macau Special Administrative Region of the People’s Republic of China (Macau). Wynn Resorts also owns 100% of and operates an integrated resort in Las Vegas, Nevada. The company operates through two segments: Macau Operations, which includes Wynn Macau and Encore at Wynn Maca, and Las Vegas Operations, which includes Wynn Las Vegas and Encore at Wynn Las Vegas. Its Macau Operations features approximately 284,000 square feet of casino space with 498 table games and 625 slot machines, two hotel towers and others. Its Las Vegas Operations features approximately 186,000 square feet of casino space with 232 table games, 1,849 slot machines, two hotel towers and others.

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Downloadable PDF version of this valuation:

ModernGraham Valuation of WYNN

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil $5,797,124,912 Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 2.11 Pass
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end 48.29% Pass
6. Moderate PEmg Ratio PEmg < 20 12.45 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 -33.78 Fail
Score
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 2.11 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 7.09 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

WYNN value chart February 2016

EPSmg $4.72
MG Growth Estimate 14.32%
MG Value $175.40
Opinion Undervalued
MG Value based on 3% Growth $68.49
MG Value based on 0% Growth $40.15
Market Implied Growth Rate 1.97%
Current Price $58.80
% of Intrinsic Value 33.52%

Wynn Resorts Ltd qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the short dividend history and the high PB ratio.  The Enterprising Investor is only initially concerned by the level of debt relative to the net current assets.  As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $2.42 in 2011 to an estimated $4.72 for 2015.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 1.97% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

Stage 3: Information for Further Research

WYNN charts February 2016

Net Current Asset Value (NCAV) -$76.88
Graham Number #NUM!
PEmg 12.45
Current Ratio 2.11
PB Ratio -33.78
Dividend Yield 6.80%
Number of Consecutive Years of Dividend Growth 0

 

[/not-level-free]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Balance Sheet Information Sep2015
Total Current Assets $2,348,198,000
Total Current Liabilities $1,113,453,000
Long-Term Debt $8,748,449,000
Total Assets $9,981,185,000
Intangible Assets $111,580,000
Total Liabilities $10,158,019,000
Shares Outstanding (Diluted Average) 101,581,000

Earnings Per Share History

Next Fiscal Year Estimate $1.22
Dec2014 $7.18
Dec2013 $7.17
Dec2012 $4.82
Dec2011 $4.88
Dec2010 $1.29
Dec2009 $0.17
Dec2008 $1.92
Dec2007 $2.34
Dec2006 $6.24
Dec2005 -$0.92
Dec2004 -$2.35
Dec2003 -$0.50
Dec2002 -$0.68
Dec2001 -$0.45
Dec2000 -$0.28

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $4.72
Dec2014 $6.01
Dec2013 $4.83
Dec2012 $3.32
Dec2011 $2.42
Dec2010 $1.59
Dec2009 $1.81
Dec2008 $2.23
Dec2007 $1.91
Dec2006 $1.25
Dec2005 -$1.15
Dec2004 -$1.13
Dec2003 -$0.48
Dec2002 -$0.40
Dec2001 -$0.22
Dec2000 -$0.09

Recommended Reading:

Other ModernGraham posts about the company

15 Best Stocks For Value Investors This Week – 9/12/15
Wynn Resorts Limited Analysis – September 2015 Update $WYNN
The 6 Best Stocks For Value Investors This Week – 6/13/15
Wynn Resorts Analysis – June 2015 Update $WYNN
5 Undervalued Companies for Enterprising Investors Near 52 Week Lows – June 2015

Other ModernGraham posts about related companies

Wynn Resorts Limited Analysis – September 2015 Update $WYNN
Wyndham Worldwide Corporation Analysis – August 2015 Update $WYN
Wynn Resorts Analysis – June 2015 Update $WYNN
International Game Technology Quarterly Valuation – March 2015 $IGT
Wynn Resorts Limited Quarterly Valuation – March 2015 $WYNN
Wynn Resorts Limited Quarterly Valuation – December 2014 $WYNN
Wynn Resorts Limited Quarterly Stock Valuation – September 2014 $WYNN

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Wynn Resorts Limited Analysis – September 2015 Update $WYNN

Benjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 10 Most Undervalued Companies for the Defensive Investor – August 2015.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a stock analysis showing a specific look at how Wynn Resorts Limited (WYNN) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Wynn Resorts, Limited is a developer, owner and operator of destination casino resorts which integrate accommodations and amenities, including fine dining, premium retail offerings, distinctive entertainment and convention facilities. The Company owns 72% of Wynn Macau, Limited, which operates an integrated resort in the Macau Special Administrative Region of the People’s Republic of China (Macau). Wynn Resorts also owns 100% of and operates an integrated resort in Las Vegas, Nevada. The company operates through two segments: Macau Operations, which includes Wynn Macau and Encore at Wynn Maca, and Las Vegas Operations, which includes Wynn Las Vegas and Encore at Wynn Las Vegas. Its Macau Operations features approximately 284,000 square feet of casino space with 498 table games and 625 slot machines, two hotel towers and others. Its Las Vegas Operations features approximately 186,000 square feet of casino space with 232 table games, 1,849 slot machines, two hotel towers and others.

[level-free]

To read the details of this valuation, you must be logged in as a premium member. If you are not a premium member, please consider becoming one.

Premium members can view a full ModernGraham valuation of the company and have access to download a PDF version of the valuation for easy reference. Here is a free sample valuation pdf, and here is a post detailing what can be found within each individual company’s valuation.

[/level-free]
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Downloadable PDF version of this valuation:

ModernGraham Valuation of WYNN – September 2015

Stage 1: Is this company suitable for the Defensive Investor or the Enterprising Investor?

What kind of Intelligent Investor are you?

Defensive Investor; must pass 6 out of the following 7 tests.
1. Adequate Size of the Enterprise Market Cap > $2Bil Pass
2. Sufficiently Strong Financial Condition Current Ratio > 2 Fail
3. Earnings Stability Positive EPS for 10 years prior Pass
4. Dividend Record Dividend Payments for 10 years prior Fail
5. Earnings Growth Increase of 33% in EPS in past 10 years using 3 year averages at beginning and end Pass
6. Moderate PEmg Ratio PEmg < 20 Pass
7. Moderate Price to Assets PB Ratio < 2.5 OR PB*PEmg < 50 Fail
Score
Enterprising Investor; must pass 4 out of the following 5 tests, or be suitable for the Defensive Investor.
1. Sufficiently Strong Financial Condition Current Ratio > 1.5 Pass
2. Sufficiently Strong Financial Condition Debt to NCA < 1.1 Fail
3. Earnings Stability Positive EPS for 5 years prior Pass
4. Dividend Record Currently Pays Dividend Pass
5. Earnings Growth EPSmg greater than 5 years ago Pass

Stage 2: Determination of Intrinsic Value

WYNN value Chart September 2015

EPSmg $4.76
MG Growth Estimate 14.52%
MG Value $178.60
Opinion Undervalued
MG Value based on 3% Growth $68.97
MG Value based on 0% Growth $40.43
Market Implied Growth Rate 3.07%
Current Price $69.65
% of Intrinsic Value 39.00%

Wynn Resorts Limited qualifies for the Enterprising Investor but not the more conservative Defensive Investor.  The Defensive Investor is concerned with the low current ratio, short dividend history, and the high PB ratio.  The Enterprising Investor is only initially concerned with the level of debt relative to the net current assets.  As a result, all Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with further research into the company.

As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $2.42 in 2011 to an estimated $4.76 for 2015.  This level of demonstrated earnings growth outpaces the market’s implied estimate of 3.07% annual earnings growth over the next 7-10 years.  As a result, the ModernGraham valuation model, based on Benjamin Graham’s formula, returns an estimate of intrinsic value above the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Wynn Resorts Limited (WYNN)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Stage 3: Information for Further Research

WYNN Charts September 2015

Net Current Asset Value (NCAV) -$72.79
Graham Number #NUM!
PEmg 14.64
Current Ratio 1.70
PB Ratio -33.99
Dividend Yield 6.82%
Number of Consecutive Years of Dividend Growth 0

 

[/level-mg-stocks-screens-subscriber]

Useful Links:

ModernGraham tagged articles Morningstar
Google Finance MSN Money
Yahoo Finance Seeking Alpha
GuruFocus SEC Filings

Most Recent Balance Sheet Figures

Total Current Assets $2,087,703,000
Total Current Liabilities $1,227,090,000
Long-Term Debt $7,985,463,000
Total Assets $9,283,042,000
Intangible Assets $112,176,000
Total Liabilities $9,491,489,000
Shares Outstanding (Diluted Average) 101,710,000

Earnings Per Share History

Next Fiscal Year Estimate $1.32
Dec14 $7.18
Dec13 $7.17
Dec12 $4.82
Dec11 $4.88
Dec10 $1.29
Dec09 $0.17
Dec08 $1.92
Dec07 $2.34
Dec06 $6.24
Dec05 -$0.92
Dec04 -$2.37
Dec03 -$0.62
Dec02 -$0.68
Dec01 -$0.45
Dec00 -$0.28

Earnings Per Share – ModernGraham History

Next Fiscal Year Estimate $4.76
Dec14 $6.01
Dec13 $4.83
Dec12 $3.32
Dec11 $2.42
Dec10 $1.59
Dec09 $1.81
Dec08 $2.23
Dec07 $1.90
Dec06 $1.23
Dec05 -$1.18
Dec04 -$1.17
Dec03 -$0.52
Dec02 -$0.40
Dec01 -$0.22
Dec00 -$0.09

Recommended Reading:

Other ModernGraham posts about the company

The 6 Best Stocks For Value Investors This Week – 6/13/15
Wynn Resorts Analysis – June 2015 Update $WYNN
5 Undervalued Companies for Enterprising Investors Near 52 Week Lows – June 2015
5 Undervalued Companies for the Enterprising Investor Near 52 Week Lows – May 2015
10 Companies Benjamin Graham Would Invest In Today – May 2015

Other ModernGraham posts about related companies

Wyndham Worldwide Corporation Analysis – August 2015 Update $WYN
Wynn Resorts Analysis – June 2015 Update $WYNN
International Game Technology Quarterly Valuation – March 2015 $IGT
Wynn Resorts Limited Quarterly Valuation – March 2015 $WYNN
Wynn Resorts Limited Quarterly Valuation – December 2014 $WYNN
Wynn Resorts Limited Quarterly Stock Valuation – September 2014 $WYNN

Disclaimer:

The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  See my current holdings here.  This article is not investment advice; any reader should speak to a registered investment adviser prior to making any investment decisions.  ModernGraham is not affiliated with the company in any manner.  Please be sure to review our detailed disclaimer.

Wynn Resorts Analysis – June 2015 Update $WYNN

220px-Wynn_Resorts_logo.svgWynn Resorts (WYNN) has shown very strong earnings growth over the last several years, which when combined with the company’s healthy dividend yield should immediately intrigue many investors. However, sentiment among analysts does not seem to agree with the numbers. For example, Alexander Valtsev writes that uncertainty about Macau is creating extensive downside risk for the company. Similarly, Daniel Jones expands a little on the issue to find events in Macau should affect Wynn more than the other big gaming companies. These are great qualitative concerns that must be taken into consideration when making investment decisions.

However, Benjamin Graham, the father of value investing, taught that investors must take emotion out of the equation, as the most important aspect to consider is whether the company is trading at a discount relative to its intrinsic value. It is through a thorough fundamental analysis that the investor is able to make a determination about a potential investment’s merits. Here’s a look at how the company fares in the ModernGraham valuation model.

The model is inspired by the teachings of Benjamin Graham and considers numerous metrics intended to help the investor reduce risk levels. The first part of the analysis is to determine whether the company is suitable for the very conservative Defensive Investor or the less conservative Enterprising Investor, who is willing to spend a greater amount of time conducting further research.

In addition, Graham strongly suggested that investors avoid speculation to remove the subjective elements of emotion. This is best achieved by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another. By using the ModernGraham method, one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.

WYNN Chart

WYNN data by YCharts

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Defensive Investor – Must pass at least 6 of the following 7 tests: Score = 4/7

  1. Adequate Size of Enterprise – Market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – Current ratio greater than 2 – FAIL
  3. Earnings Stability – Positive earnings per share for at least 10 straight years – PASS
  4. Dividend Record – Has paid a dividend for at least 10 straight years – FAIL
  5. Earnings Growth – Earnings per share has increased by at least 1/3rd over the last 10 years, using 3-year averages at the beginning and end of the period – PASS
  6. Moderate PEmg (price over normalized earnings) ratio – PEmg is less than 20 – PASS
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL

Enterprising Investor – Must pass at least 4 of the following 5 tests or be suitable for a Defensive Investor: Score = 4/5

  1. Sufficiently Strong Financial Condition, Part 1 – Current ratio greater than 1.5 – PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt-to-Net Current Assets ratio less than 1.1 – FAIL
  3. Earnings Stability – Positive earnings per share for at least 5 years – PASS
  4. Dividend Record – Currently pays a dividend – PASS
  5. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $102.40
MG Value $203.41
MG Opinion Undervalued
Value Based on 3% Growth $76.61
Value Based on 0% Growth $44.91
Market Implied Growth Rate 5.44%
Net Current Asset Value (NCAV) -$69.17
PEmg 19.38
Current Ratio 1.91
PB Ratio -46.22

Balance Sheet – March 2015

Current Assets $2,383,000,000
Current Liabilities $1,248,000,000
Total Debt $7,834,000,000
Total Assets $9,152,000,000
Intangible Assets $113,000,000
Total Liabilities $9,376,000,000
Outstanding Shares 101,100,000

Earnings Per Share

2015 (estimate) $2.90
2014 $7.18
2013 $7.17
2012 $4.82
2011 $4.88
2010 $1.29
2009 $0.17
2008 $1.92
2007 $2.34
2006 $6.24
2005 -$0.92

Earnings Per Share – ModernGraham

2015 (estimate) $5.28
2014 $6.01
2013 $4.83
2012 $3.32
2011 $2.42
2010 $1.59

Dividend History

WYNN Dividend Chart

WYNN Dividend data by YCharts

Competitive Comparison

Wynn is very attractive when compared to some of its competitors. For example, a ModernGraham valuation of International Game Technology (IGT) indicates that company is suitable for Enterprising Investors but not the Defensive Investor, and is currently overvalued.

Conclusion

Wynn performs well in the ModernGraham model and is suitable for both Defensive Investors and Enterprising Investors. The Defensive Investor is concerned with the low current ratio, the inconsistent dividend history, and the poor PB ratio, while the Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, all Enterprising Investors should feel very comfortable proceeding to the next part of the analysis, which is a determination of the company’s intrinsic value.

When it comes to valuation, it is critical to consider the company’s earnings history. In this case, the company has grown its EPSmg (normalized earnings) from $2.42 in 2011 to an estimated $5.28 for 2015. This is a strong level of growth and is well above the market’s implied estimate of only 5.44% annual earnings growth over the next 7-10 years.

Here, actual growth in EPSmg over the last several years has averaged nearly 24% annually, so the market is expecting a very significant drop in earnings growth. The ModernGraham valuation model reduces the historical growth to a more conservative figure, assuming that some slowdown will occur, but still estimates a growth figure much higher than the market’s implied rate. Therefore, the model returns an estimate of intrinsic value well above the current price, indicating the company is significantly undervalued at the present time.

Enterprising Investors should take this information regarding the company’s valuation and proceed with further research into whether the company would be suitable for individual portfolios, as it has passed a ModernGraham review.

Disclaimer:  The author did not hold a position in any company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

[/level-mg-stocks-screens-subscriber]

Wynn Resorts Limited Quarterly Valuation – March 2015 $WYNN

220px-Wynn_Resorts_logo.svg

Wynn Resorts does fairly well in the ModernGraham model, and is suitable for Enterprising Investors. The Defensive Investor is concerned with the inconsistent dividend history, unstable earnings over the last ten years, and the high PEmg ratio, while the Enterprising Investor is only concerned with the level of debt relative to the net current assets. As a result, Enterprising Investors should feel very comfortable proceeding to the next part of the analysis, which is a determination of the company’s intrinsic value.

When it comes to valuation, it is critical to consider the company’s earnings history. In this case, the company has grown its EPSmg (normalized earnings) from $1.59 in 2010 to $6.01 for 2014. This is a strong level of demonstrated growth, which is well above the market’s implied estimate of 7.16% annual earnings growth over the next 7-10 years. Here, the historical growth in EPSmg over the last five years is around 55.67% per year, which is clearly unsustainable over the long term. The ModernGraham valuation model reduces the historical growth to a more conservative figure, assuming that some slowdown will occur. Therefore, the model returns an estimate of intrinsic value well above the current price, indicating the company is significantly undervalued at the present time.

Be sure to check out previous ModernGraham valuations of Wynn Resorts Limited (WYNN) for a greater perspective!

Read the full valuation on Seeking Alpha!

WYNN Chart

WYNN data by YCharts

Disclaimer: The author did not hold a position in Wynn Resorts Limited (WYNN) at the time of publication and had no intention of changing that position within the next 72 hours. Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

Wynn Resorts Limited Quarterly Valuation – December 2014 $WYNN

220px-Wynn_Resorts_logo.svgBenjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 5 Most Undervalued Companies for the Defensive Investor – November 2014.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Wynn Resorts Limited (WYNN) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Wynn Resorts, Limited is a developer, owner and operator of destination casino resorts. The Company owns and operates two destination casino resorts. In Las Vegas, Nevada, the Company owns and operates Wynn Las Vegas, which includes Encore at Wynn Las Vegas. In the Macau Special Administrative Region of the People’s Republic of China (Macau) the Company owns and operates Wynn Macau, which includes Encore at Wynn Macau. The Company has two segments: Las Vegas Operations and Macau Operations. The Company refers to the integrated Wynn Las Vegas and Encore at Wynn Las Vegas resorts as Wynn Las Vegas, Encore or as its Las Vegas Operations. The Company refers to the integrated Wynn Macau and Encore at Wynn Macau resorts as Wynn Macau, Encore or as its Macau Operations.

Defensive Investor – must pass at least 6 of the following 7 tests: Score = 3/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 – PASS
  3. Earnings Stability – positive earnings per share for at least 10 straight years – FAIL
  4. Dividend Record – has paid a dividend for at least 10 straight years – FAIL
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  6. Moderate PEmg ratio – PEmg is less than 20 – FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL

Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 4/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 – PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 – FAIL
  3. Earnings Stability – positive earnings per share for at least 5 years – PASS
  4. Dividend Record – currently pays a dividend – PASS
  5. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $163.90
MG Value $236.36
MG Opinion Undervalued
Value Based on 3% Growth $89.02
Value Based on 0% Growth $52.18
Market Implied Growth Rate 9.10%
Net Current Asset Value (NCAV) -$55.07
PEmg 26.70
Current Ratio 2.58
PB Ratio 175.98

Balance Sheet – September 2014

Current Assets $3,470,000,000
Current Liabilities $1,344,000,000
Total Debt $7,341,000,000
Total Assets $9,182,000,000
Intangible Assets $29,000,000
Total Liabilities $9,087,000,000
Outstanding Shares 102,000,000

Earnings Per Share

2014 (estimate) $7.58
2013 $7.17
2012 $4.82
2011 $4.88
2010 $1.29
2009 $0.17
2008 $1.92
2007 $2.34
2006 $6.24
2005 -$0.92
2004 -$2.35

Earnings Per Share – ModernGraham

2014 (estimate) $6.14
2013 $4.83
2012 $3.32
2011 $2.42
2010 $1.59
2009 $1.81

Dividend History

Conclusion:

Wynn Resorts Limited qualifies for the Enterprising Investor but not for the Defensive Investor.  The Defensive Investor is concerned by the lack of stable earnings or dividends over the last ten years, and the high PEmg and PB ratios.  The Enterprising Investor is only concerned by the high level of debt relative to the net current assets.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel very comfortable proceeding with further research and comparing the company to other opportunities.  As for a valuation, the company appears to be undervalued after growing its EPSmg (normalized earnings) from $1.59 in 2010 to an estimated $6.14 for 2014.  This level of demonstrated growth is greater than the market’s implied estimate of 9.1% earnings growth and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value above the price.

Be sure to check out previous ModernGraham valuations of Wynn Resorts Limited (WYNN) for greater perspective!

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Wynn Resorts Limited (WYNN)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in Wynn Resorts Limited (WYNN) or in any other company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

Wynn Resorts Limited Quarterly Stock Valuation – September 2014 $WYNN

220px-Wynn_Resorts_logo.svgBenjamin Graham taught that Intelligent Investors must do a thorough fundamental analysis of investment opportunities to determine their intrinsic value and inherent risk.  This is best done by utilizing a systematic approach to analysis that will provide investors with a sense of how a specific company compares to another company or by reviewing the 5 Undervalued Companies for the Enterprising Investor.  By using the ModernGraham method one can review a company’s historical accomplishments and determine an intrinsic value that can be compared across industries.  What follows is a specific look at how Wynn Resorts Ltd (WYNN) fares in the ModernGraham valuation model.

Company Profile (obtained from Google Finance): Wynn Resorts, Limited is a developer, owner and operator of destination casino resorts. The Company owns and operates two destination casino resorts. In Las Vegas, Nevada, the Company owns and operates Wynn Las Vegas, which includes Encore at Wynn Las Vegas. In the Macau Special Administrative Region of the People’s Republic of China (Macau) the Company owns and operates Wynn Macau, which includes Encore at Wynn Macau. The Company has two segments: Las Vegas Operations and Macau Operations. The Company refers to the integrated Wynn Las Vegas and Encore at Wynn Las Vegas resorts as Wynn Las Vegas, Encore or as its Las Vegas Operations. The Company refers to the integrated Wynn Macau and Encore at Wynn Macau resorts as Wynn Macau, Encore or as its Macau Operations.
WYNN Chart

WYNN data by YCharts

Defensive Investor – must pass at least 6 of the following 7 tests: Score = 3/7

  1. Adequate Size of Enterprise – market capitalization of at least $2 billion – PASS
  2. Sufficiently Strong Financial Condition – current ratio greater than 2 – PASS
  3. Earnings Stability – positive earnings per share for at least 10 straight years – FAIL
  4. Dividend Record – has paid a dividend for at least 10 straight years – FAIL
  5. Earnings Growth – earnings per share has increased by at least 1/3 over the last 10 years using 3 year averages at beginning and end of period – PASS
  6. Moderate PEmg ratio – PEmg is less than 20 – FAIL
  7. Moderate Price to Assets – PB ratio is less than 2.5 or PB x PEmg is less than 50 – FAIL

Enterprising Investor – must pass at least 4 of the following 5 tests or be suitable for a defensive investor: Score = 4/5

  1. Sufficiently Strong Financial Condition, Part 1 – current ratio greater than 1.5 – PASS
  2. Sufficiently Strong Financial Condition, Part 2 – Debt to Net Current Assets ratio less than 1.1 – FAIL
  3. Earnings Stability – positive earnings per share for at least 5 years – PASS
  4. Dividend Record – currently pays a dividend – PASS
  5. Earnings growth – EPSmg greater than 5 years ago – PASS

Valuation Summary

Key Data:

Recent Price $184.61
MG Value $245.35
MG Opinion Fairly Valued
Value Based on 3% Growth $92.40
Value Based on 0% Growth $54.17
Market Implied Growth Rate 10.23%
Net Current Asset Value (NCAV) -$53.59
PEmg 28.97
Current Ratio 2.82
PB Ratio 874.31

Balance Sheet – 6/30/2014

Current Assets $3,618,200,000
Current Liabilities $1,285,200,000
Total Debt $7,310,100,000
Total Assets $9,071,300,000
Intangible Assets $29,600,000
Total Liabilities $9,049,900,000
Outstanding Shares 101,350,000

Earnings Per Share

2014 (estimate) $8.28
2013 $7.17
2012 $4.82
2011 $4.88
2010 $1.29
2009 $0.17
2008 $1.92
2007 $2.29
2006 $5.63
2005 -$0.92
2004 -$2.37

Earnings Per Share – ModernGraham

2014 (estimate) $6.37
2013 $4.83
2012 $3.32
2011 $2.41
2010 $1.54
2009 $1.72

Dividend History

WYNN Dividend Chart

WYNN Dividend data by YCharts

Conclusion:

Wynn Resorts is suitable for the Enterprising Investor but not the Defensive Investor.  The Defensive Investor is concerned by the lack of earnings stability over the last ten years, the lack of dividend stability over the same period, as well as the high PEmg and PB ratios.  The Enterprising Investor’s only concern is the high level of debt relative to the net current assets.  As a result, Enterprising Investors following the ModernGraham approach based on Benjamin Graham’s methods should feel comfortable proceeding with research into the company and comparing it to other opportunities.  As for a valuation, the company appears to be fairly valued after growing its EPSmg (normalized earnings) from $1.54 in 2010 to an estimated $6.37 for 2014.  This level of demonstrated growth supports the market’s implied estimate of 10.23% earnings growth and leads the ModernGraham valuation model, based on Benjamin Graham’s formula, to return an estimate of intrinsic value within a margin of safety relative to the price.

The next part of the analysis is up to individual investors, and requires discussion of the company’s prospects.  What do you think?  What value would you put on Wynn Resorts (WYNN)?  Where do you see the company going in the future?  Is there a company you like better?  Leave a comment on our Facebook page or mention @ModernGraham on Twitter to discuss.

Disclaimer:  The author did not hold a position in Wynn Resorts (WYNN) or in any other company mentioned in this article at the time of publication and had no intention of changing that position within the next 72 hours.  Logo taken from Wikipedia for the sole purpose of identifying the company; this article is not affiliated with the company in any manner.

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