Recent Performance Snapshot for Wynn Resorts

Wynn Resorts (WYNN) has been under pressure recently, with the stock down 9% over the past month and 11% over the past 3 months, closing at US$94.37 on the latest trading day.

Zooming out, Wynn Resorts’ share price has retreated in recent months, with year to date share price returns down 23.01% and the 1 year total shareholder return declining 11.52%. This points to fading momentum despite ongoing resort operations across Macau, Las Vegas and Boston.

If you are reassessing your portfolio after Wynn Resorts’ weaker recent share price performance, this can be a useful moment to look at other potential ideas through the Simply Wall St screener for 18 top founder-led companies

The recent slide in Wynn Resorts raises a practical question for investors: is this mainly the market cooling on the stock, or does it better reflect what the current earnings and cash flows are worth?

Most Popular Narrative: 31% Undervalued

At a last close of $94.37 versus a narrative fair value of $135.89, Wynn Resorts is framed as materially undervalued, with that gap tied to longer term cash flow potential.

The imminent launch of Wynn Al Marjan Island, with first mover advantage and limited near term competition in a potentially multi billion dollar new market, is a major forward catalyst that is currently underappreciated by investors and could drive a meaningful step change in both consolidated revenue and EBITDAR.

Want to see what is baked into that upside case for Wynn Resorts? Revenue build, margin lift and a rich future earnings multiple all sit at the core. The specific path from today’s earnings to that fair value may surprise you.

Result: Fair Value of $135.89 (UNDERVALUED)

However, you also need to watch for weaker Macau performance or rising operating and wage costs, which could pressure the margins of Wynn Resorts and strain its future project returns.

Another View on Wynn Resorts Valuation

The earlier narrative leans on future earnings and fair value estimates that suggest Wynn Resorts is undervalued. However, the current P/E of 25.8x sits above the US Hospitality industry at 23.8x, and only slightly below the fair ratio of 27.5x. This points to less obvious room for error if results disappoint.

For a closer look at how this earnings multiple compares with both peers and that fair ratio level, take a look at the See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With sentiment on Wynn Resorts split between pressure on the share price and a potential valuation gap, it may be useful to review the figures yourself and then weigh up the 3 key rewards and 2 important warning signs.

Looking for more investment ideas beyond Wynn Resorts?

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• Target stronger value opportunities by reviewing the 50 high quality undervalued stocks that pair solid fundamentals with attractive pricing.
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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.