It's shaping up to be a tough period for Melco Resorts & Entertainment Limited (NASDAQ:MLCO), which a week ago released some disappointing second-quarter results that could have a notable impact on how the market views the stock. Results showed a clear earnings miss, with US$1.3b revenue coming in 2.2% lower than what the analystsexpected. Statutory earnings per share (EPS) of US$0.058 missed the mark badly, arriving some 24% below what was expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Melco Resorts & Entertainment after the latest results.

Taking into account the latest results, Melco Resorts & Entertainment's twelve analysts currently expect revenues in 2026 to be US$5.28b, approximately in line with the last 12 months. Statutory earnings per share are expected to plummet 21% to US$0.48 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$5.32b and earnings per share (EPS) of US$0.53 in 2026. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$7.42, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Melco Resorts & Entertainment, with the most bullish analyst valuing it at US$10.20 and the most bearish at US$5.50 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Melco Resorts & Entertainment's revenue growth is expected to slow, with the forecast 2.3% annualised growth rate until the end of 2026 being well below the historical 27% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.5% per year. Factoring in the forecast slowdown in growth, it seems obvious that Melco Resorts & Entertainment is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Melco Resorts & Entertainment's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Melco Resorts & Entertainment. Long-term earnings power is much more important than next year's profits. We have forecasts for Melco Resorts & Entertainment going out to 2028, and you can see them free on our platform here.

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.