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.


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.


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
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



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


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.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.