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Melco Resorts & Entertainment (MLCO)
NASDAQ:MLCO
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Melco Resorts & Entertainment
(NASDAQ:MLCO)
Rating:55Neutral
Price Target:
$9.00
▲(4.17% Upside)
Positive Factors
Entertainment and Non-Gaming Attractions
The flagship show 'House of Dancing Waters' is expected to attract more non-gaming patrons, potentially increasing its popularity.
Gaming Sector Performance
The Macau gaming sector experienced strong VIP and premium-mass segments, indicating robust demand.
Interest Rates
The recent drop in HIBOR is beneficial for the company as it should lead to lower interest expenses.
Negative Factors
Dividend Policy
Melco's valuation is constrained by the lack of near-term dividend payments as the company prioritizes debt repayment.
Leverage
High leverage at 5.5x net debt/EBITDA is a concern for MLCO.
Melco Resorts & Entertainment (MLCO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.37B
Dividend YieldN/A
Average Volume (3M)3.90M
Price to Earnings (P/E)63.4
Beta (1Y)1.03
Revenue Growth12.51%
EPS GrowthN/A
CountryUS
Employees21,784
SectorConsumer Cyclical
Sector Strength71
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)0.04
Shares Outstanding411,198,850
10 Day Avg. Volume2,999,537
30 Day Avg. Volume3,895,885
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap2.83
Enterprise Value/Revenue2.01
Enterprise Value/Gross Profit5.99
Enterprise Value/Ebitda9.24
Forecast
1Y Price Target
$10.00Price Target Upside15.74% Upside
Rating ConsensusModerate 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: 0.70%|
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong performance in Macau with significant EBITDA growth, the success of non-gaming initiatives like House of Dancing Water, and a strong liquidity position. However, challenges persist in the Philippines due to competitive pressures, and geopolitical issues impacted Cyprus operations, leading to some financial impairments. The overall sentiment is cautiously optimistic with strong growth in core areas, despite challenges in other regions.Q2-2025 Updates
Positive Updates
Strong Performance in Macau
Macau property EBITDA grew by 35% year-over-year and 13% quarter-to-quarter. Gaming volumes and revenues were up, with mass table games revenue at both City of Dreams and Studio City reaching all-time highs.
House of Dancing Water Success
House of Dancing Water reopened in May with a refreshed storyline and enhanced visuals, contributing to an average theater occupancy of 98% and boosting non-gaming revenue and visitation in Macau.
Group-wide EBITDA Growth
Group-wide adjusted property EBITDA for the second quarter of 2025 grew 25% year-over-year to approximately $378 million.
Resilient 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.
Launch of City of Dreams Sri Lanka
Opening of City of Dreams Sri Lanka on August 1, marking the first integrated resort in Sri Lanka and South Asia, targeting the premium Indian customer base.
Negative Updates
Philippines Market Challenges
The competitive environment in the Philippines impacted performance, leading to cost reduction initiatives and rationalization of patron reinvestment and marketing expenses.
Impact of Iran-Israel War on Cyprus Operations
City of Dreams Mediterranean and satellite casinos in Cyprus were affected by the Iran-Israel war in June, although recovery has been faster than expected.
Impairment Due to Casino Closures
Recognized an impairment in goodwill of approximately $56 million due to the closure of Grand Dragon Casino and three Mocha Clubs.
Company Guidance
During the second quarter of 2025, Melco Resorts & Entertainment Limited reported a robust financial performance, particularly in its Macau operations, with property EBITDA increasing by 35% year-over-year and 13% from the previous quarter. The company's group-wide adjusted property EBITDA grew by 25% to approximately $378 million. Melco's Macau properties achieved record mass table games revenue, while the House of Dancing Water show contributed to non-gaming revenue with a 98% theater occupancy rate. Macau's operating expenses were reduced to about $3 million per day, excluding certain entertainment costs, leading to a property EBITDA margin of 29.2%. In contrast, the Philippine market faced competitive pressures, prompting cost-reduction initiatives, yet a recovery was noted in July. Cyprus operations were briefly affected by geopolitical tensions but quickly rebounded. The company also highlighted its strong liquidity position with $2.3 billion available, including $1.2 billion in cash, and detailed its strategic investments and market expansions, including the opening of City of Dreams Sri Lanka.Melco Resorts & Entertainment Financial Statement Overview
Summary
Melco Resorts & Entertainment shows marginal improvements in revenue and operational profitability. However, the balance sheet reveals high leverage and negative equity, indicating financial instability. Cash flow issues further exacerbate concerns about liquidity and sustainability.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
8.64
Price Trends
7.84
Positive
6.66
Positive
6.35
Positive
Market Momentum
0.18
Positive
56.73
Neutral
57.72
Neutral
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 8.64 is below the 20-day moving average (MA) of 8.81, above the 50-day MA of 7.84, and above the 200-day MA of 6.35, indicating a neutral trend. The MACD of 0.18 indicates Positive momentum. The RSI at 56.73 is Neutral, neither overbought nor oversold. The STOCH value of 57.72 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $6.53B | 12.55 | 36.36% | 0.84% | 6.40% | 26.09% | |
74 Outperform | $36.99B | 27.21 | 49.16% | 1.76% | 1.62% | -7.14% | |
67 Neutral | $11.29B | 32.05 | -51.73% | 0.89% | -1.94% | -53.90% | |
61 Neutral | $17.22B | 11.58 | -7.48% | 3.16% | 1.46% | -15.87% | |
60 Neutral | $9.36B | 18.94 | 17.34% | ― | 0.89% | -31.56% | |
55 Neutral | $3.37B | 63.39 | 25.40% | ― | 12.51% | ― | |
50 Neutral | $5.00B | ― | -4.76% | ― | -0.15% | 28.05% |
* Consumer Cyclical Sector Average
Performance Comparison
MLCO
Melco Resorts & Entertainment
8.68
3.51
67.89%
BYD
Boyd Gaming
83.40
27.66
49.62%
LVS
Las Vegas Sands
53.89
15.33
39.76%
MGM
MGM Resorts
35.40
-2.76
-7.23%
WYNN
Wynn Resorts
112.49
39.12
53.32%
CZR
Caesars Entertainment
24.64
-10.60
-30.08%
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.