Education
About Us
Working with TipRanks
Follow Us
Melco Resorts & Entertainment (MLCO)
NASDAQ:MLCO
RESEARCH TOOLSreports
Top Page
Melco Resorts & Entertainment
(NASDAQ:MLCO)
Rating:58Neutral
Price Target:
$10.00
▼(-0.89% Downside)
Positive Factors
Interest Rates
The recent drop in HIBOR is beneficial for the company as it should lead to lower interest expenses.
Macau Gaming Sector Performance
The price objective for Melco was raised due to a stronger-than-expected performance in the Macau gaming sector.
Negative Factors
Debt and Valuation Concerns
Melco's valuation is constrained by the lack of near-term dividend payments as the company prioritizes debt repayment.
Investment Requirements
Operators, including Melco, may need to increase investments in Hengqin, which could impact financials despite not being expected to be material.
Melco Resorts & Entertainment (MLCO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.90B
Dividend YieldN/A
Average Volume (3M)3.00M
Price to Earnings (P/E)74.3
Beta (1Y)0.96
Revenue Growth12.51%
EPS GrowthN/A
CountryUS
Employees21,784
SectorConsumer Cyclical
Sector Strength83
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)0.04
Shares Outstanding390,407,200
10 Day Avg. Volume3,612,948
30 Day Avg. Volume3,001,030
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap2.45
Enterprise Value/Revenue2.01
Enterprise Value/Gross Profit5.99
Enterprise Value/Ebitda9.24
Forecast
1Y Price Target
$10.45Price Target Upside3.57% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
Melco Resorts & Entertainment Business Overview & Revenue Model
Company DescriptionMelco Resorts & Entertainment Limited is a leading developer and operator of integrated resorts in Asia, primarily focused on the gaming and hospitality sectors. The company operates several premium properties, including City of Dreams and Studio City in Macau, as well as City of Dreams Manila in the Philippines. Melco is dedicated to providing high-quality entertainment, gaming, and hospitality experiences, with a portfolio that includes hotels, casinos, restaurants, and retail outlets.
How the Company Makes MoneyMelco Resorts & Entertainment generates revenue primarily through its casino operations, which include gaming tables, slot machines, and VIP gaming services. The company has a significant presence in the mass gaming segment, catering to both local and international tourists. Additionally, Melco earns revenue from its non-gaming segments, which encompass hotel accommodations, food and beverage services, retail sales, and entertainment offerings. The company's luxury resorts attract high-spending customers, and its focus on premium experiences enhances its profitability. Strategic partnerships with international brands and a commitment to quality service further bolster its revenue streams.
Melco Resorts & Entertainment Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive sentiment with significant growth in Macau despite challenges in the Philippines and Cyprus. The company's strategic initiatives and strong liquidity position further strengthen its outlook.Q2-2025 Updates
Positive Updates
Strong Macau Performance
Macau property EBITDA grew by 35% year-over-year and 13% quarter-to-quarter. Mass table games revenue at both City of Dreams and Studio City reached all-time highs. Occupancy of the House of Dancing Water theater was around 98%, contributing to growing non-gaming revenue and visitation into Macau.
Improvement in Group-Wide EBITDA
Group-wide adjusted property EBITDA for the second quarter of 2025 grew 25% year-over-year to approximately $378 million. Macau property EBITDA margin reached 29.2%, the second highest on record.
Robust Liquidity Position
Available liquidity of $2.3 billion with consolidated cash on hand of approximately $1.2 billion as of the end of the second quarter of 2025. Melco repurchased approximately $120 million of shares, emphasizing shareholder value.
Launch of City of Dreams Sri Lanka
City of Dreams Sri Lanka, the first integrated resort in South Asia, is set to open, targeting the premium Indian customer base.
Negative Updates
Challenges in the Philippines
The heightened competitive environment impacted performance, though cost reduction initiatives were implemented to improve profitability. Recovery in gaming revenue is noted in July.
Impact of Geopolitical Events in Cyprus
City of Dreams Mediterranean and satellite casinos were impacted by the Iran-Israel war in June, though recovery was faster than expected.
Impairment Charge Due to Closures
Recognition of an impairment in goodwill of approximately $56 million due to the planned closure of Grand Dragon Casino and three Mocha Clubs.
Company Guidance
In the second quarter of 2025, Melco Resorts & Entertainment Limited reported a strong performance with a 35% year-over-year increase in Macau property EBITDA and a 13% increase quarter-to-quarter. Group-wide adjusted property EBITDA grew 25% year-over-year to approximately $378 million. The company achieved a Macau property EBITDA margin of 29.2%, the second highest on record. Gaming volumes and revenues were robust, with mass table games revenue at City of Dreams and Studio City reaching all-time highs. Non-gaming revenues benefited from the 98% occupancy of the House of Dancing Water theater since its reopening in May. In the Philippines, cost reduction initiatives led to higher profitability and a recovery in gaming revenue in July. Melco plans to continue optimizing its Macau operations and is finalizing the renovation of the Countdown hotel, targeting a third-quarter 2026 opening with 150 luxury suites. The company also opened City of Dreams Sri Lanka on August 1, expanding its reach in South Asia. Melco's liquidity remains strong, with $2.3 billion available and plans to reduce debt using free cash flow.Melco Resorts & Entertainment Financial Statement Overview
Summary
Melco Resorts & Entertainment shows marginal improvement in revenue and operational profitability. However, the balance sheet reveals negative stockholders' equity and high leverage, while cash flow analysis indicates liquidity constraints. These financial challenges overshadow operational improvements.Income Statement
Melco Resorts & Entertainment shows marginal improvement in its financial performance with a significant increase in total revenue from the previous year. The gross profit margin improved to 35.85% in 2024 from 31.36% in 2023. However, the net profit margin remains low at 0.94% in 2024, despite recovering from negative figures in previous years. The EBIT and EBITDA margins show positive trends, reaching 10.45% and 22.16% respectively in 2024, highlighting operational improvements. Overall, the company is on a path to recovery but still faces challenges in achieving sustainable profitability.45
Neutral
Balance Sheet
The balance sheet reveals a concerning scenario with a negative stockholders' equity of -$1.33 billion in 2024, indicating insolvency. This results in a negative equity ratio, which is a critical red flag. Moreover, the debt-to-equity ratio cannot be calculated due to negative equity, but the high total debt of $7.46 billion suggests potential leverage risks. Return on equity cannot be assessed due to negative equity. The company's financial stability is a major concern, overshadowing the improvements in operational metrics.30
Negative
Cash Flow
Cash flow analysis indicates significant issues with operational sustainability. In 2024, operating cash flow, capital expenditure, and free cash flow are reported as zero, making it challenging to assess cash flow efficiency. The absence of positive free cash flow and operating cash flow growth in recent years suggests liquidity constraints and inadequate cash generation to cover operational and capital expenses. This highlights the need for better cash flow management to support ongoing business operations.20
Very Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.76B | 4.64B | 3.78B | 1.35B | 2.01B | 1.73B |
| Gross Profit | 1.59B | 1.66B | 1.18B | 286.52M | 520.58M | 189.52M |
| EBITDA | 1.03B | 1.03B | 615.58M | -209.54M | -34.99M | -513.09M |
| Net Income | 60.91M | 43.54M | -326.92M | -1.10B | -956.46M | -1.45B |
Balance Sheet | ||||||
| Total Assets | 7.90B | 7.99B | 8.34B | 9.30B | 8.88B | 9.02B |
| Cash, Cash Equivalents and Short-Term Investments | 1.10B | 1.15B | 1.31B | 1.81B | 1.65B | 1.76B |
| Total Debt | 7.46B | 7.46B | 7.77B | 8.71B | 7.04B | 6.10B |
| Total Liabilities | 8.85B | 8.93B | 9.18B | 9.62B | 8.06B | 7.18B |
| Stockholders Equity | -1.33B | -1.33B | -1.29B | -850.33M | 244.75M | 1.10B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 325.48M | 358.80M | -1.24B | -948.17M | -1.32B |
| Operating Cash Flow | 0.00 | 626.66M | 622.69M | -619.43M | -268.77M | -860.96M |
| Investing Cash Flow | 0.00 | -300.81M | -48.51M | -806.11M | -674.55M | -53.31M |
| Financing Cash Flow | 0.00 | -478.35M | -1.13B | 1.78B | 821.75M | 1.26B |
Melco Resorts & Entertainment Technical Analysis
Positive
10.09
Price Trends
8.81
Positive
7.33
Positive
6.56
Positive
Market Momentum
0.42
Negative
76.76
Negative
95.31
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MLCO, the sentiment is Positive. The current price of 10.09 is above the 20-day moving average (MA) of 9.21, above the 50-day MA of 8.81, and above the 200-day MA of 6.56, indicating a bullish trend. The MACD of 0.42 indicates Negative momentum. The RSI at 76.76 is Negative, neither overbought nor oversold. The STOCH value of 95.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MLCO.
Melco Resorts & Entertainment Risk Analysis
Melco Resorts & Entertainment disclosed 91 risk factors in its most recent earnings report. Melco Resorts & Entertainment reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Melco Resorts & Entertainment Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $6.87B | 13.19 | 36.36% | 0.81% | 6.40% | 26.09% | |
68 Neutral | $13.05B | 37.01 | -51.73% | 0.81% | -1.94% | -53.90% | |
65 Neutral | $10.59B | 21.00 | 17.34% | ― | 0.89% | -31.56% | |
61 Neutral | $17.96B | 13.14 | -5.29% | 3.00% | 1.25% | -13.95% | |
59 Neutral | $37.83B | 27.96 | 49.16% | 1.72% | 1.62% | -7.14% | |
58 Neutral | $3.90B | 74.32 | 25.40% | ― | 12.51% | ― | |
52 Neutral | $5.36B | ― | -4.76% | ― | -0.15% | 28.05% |
* Consumer Cyclical Sector Average
Performance Comparison
MLCO
Melco Resorts & Entertainment
9.74
4.37
81.38%
BYD
Boyd Gaming
86.46
27.35
46.27%
LVS
Las Vegas Sands
55.11
16.24
41.78%
MGM
MGM Resorts
37.03
2.02
5.77%
WYNN
Wynn Resorts
122.89
46.96
61.85%
CZR
Caesars Entertainment
25.75
-11.12
-30.16%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.