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Melco Resorts & Entertainment (MLCO)
NASDAQ:MLCO
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Melco Resorts & Entertainment
(NASDAQ:MLCO)
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Select Model
Rating:44Neutral
Price Target:
$6.00
▲(2.92% Upside)
Action:ReiteratedDate:01/18/26
The score is primarily constrained by financial stability risks—negative equity, high leverage, and weak/unclear cash generation—despite improving operating margins. Technicals also remain decisively bearish with the stock trading well below key moving averages. Offsetting factors include a constructive earnings update with rising EBITDA, solid liquidity, and ongoing debt reduction, while valuation appears only moderate with no dividend support.
Positive Factors
EBITDA Growth & Operational Recovery
Sustained, double-digit property EBITDA growth across the group indicates durable operational recovery and improving underlying unit economics. Higher EBITDA supports margin sustainability, funds reinvestment and deleveraging, and shows the business model is regaining scale across markets.
Macau Market Momentum
Strong, persistent recovery in Macau—the company's core market—boosts long-term revenue potential and market share. Higher mass-table and GGR trends reflect structural tourism rebound and pricing power, underpinning sustainable cash generation from the firm's largest operations.
Debt Reduction Actions
Proactive note redemptions materially reduce near-term refinancing risk and interest burden, improving capital structure durability. Demonstrates management focus on liability management, which supports long-term solvency and optionality for strategic investments or dividends.
Negative Factors
Negative Equity
Persistently negative equity is a structural solvency flag that limits financing options, increases covenant and liquidity risk, and can constrain strategic flexibility. It can impair access to capital markets and force asset sales or dilutive financing to shore up the balance sheet.
Weak Cash Generation
Absence of positive operating and free cash flow signals constrained cash conversion and raises doubts about sustainable self-funding for capex, dividends, or debt servicing. Long-term growth and deleveraging depend on restoring reliable cash generation.
High Absolute Debt Burden
A multi-billion dollar debt load creates persistent interest and refinancing pressures, especially given negative equity and weak cash flow. High leverage reduces resilience to demand shocks, raises refinancing risk, and constrains capital allocation for growth or returns.
Melco Resorts & Entertainment (MLCO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.20B
Dividend YieldN/A
Average Volume (3M)2.77M
Price to Earnings (P/E)12.7
Beta (1Y)1.05
Revenue Growth11.32%
EPS GrowthN/A
CountryUS
Employees21,784
SectorConsumer Cyclical
Sector Strength84
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)0.19
Shares Outstanding390,407,200
10 Day Avg. Volume3,070,582
30 Day Avg. Volume2,770,724
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)-0.81
Price to Sales (P/S)0.20
P/FCF Ratio0.00
Enterprise Value/Market Cap3.07
Enterprise Value/Revenue1.31
Enterprise Value/Gross Profit3.56
Enterprise Value/Ebitda5.89
Forecast
1Y Price Target
$9.42Price Target Upside61.58% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Melco Resorts & Entertainment Business Overview & Revenue Model
Company DescriptionMelco Resorts & Entertainment Limited develops, owns, and operates casino gaming and resort facilities in Asia and Europe. It owns and operates City of Dreams, an integrated casino resort that has approximately 511 gaming tables and 572 gaming machines; approximately 770 rooms, and suites and villas; approximately 25 restaurants and bars, and 165 retail outlets; and health and fitness clubs, three swimming pools, spa and salons, and banquet and meeting facilities. The company also operates Altira Macau, a casino hotel, which has approximately 101 gaming tables and 121 gaming machines; 230 hotel rooms; various dining and casual restaurants, and recreation and leisure facilities; and various non-gaming amenities comprising a spa, gymnasium, outdoor garden podium, and sky terrace lounge. In addition, it operates Studio City, a cinematically themed integrated resort with gaming facilities, hotel, entertainment, retail, and food and beverage outlets that comprises 290 gaming tables and 645 gaming machines in Cotai, Macau. Further, the company owns and operates seven Mocha Clubs with 813 gaming machines, as well as Grand Dragon casino in Taipa Island, Macau. Additionally, it operates and manages City of Dreams Manila, an integrated resort in the Entertainment City complex in Manila; a casino in Limassol and three satellite casinos in Nicosia, Ayia Napa, and Paphos in Cyprus. The company was formerly known as Melco Crown Entertainment Limited and changed its name to Melco Resorts & Entertainment Limited in April 2017. The company was incorporated in 2004 and is headquartered in Central, Hong Kong. Melco Resorts & Entertainment Limited is a subsidiary of Melco Leisure and Entertainment Group Limited.
How the Company Makes MoneyMelco Resorts & Entertainment generates revenue primarily through its gaming operations, which include table games and electronic gaming machines in its casinos. The company also earns significant income from non-gaming sectors such as hotel accommodations, dining, entertainment, and retail, all of which attract both gaming and non-gaming customers. Key revenue streams include room bookings, food and beverage sales, and ticket sales for entertainment events. Additionally, Melco has established strategic partnerships with various local and international brands, enhancing its offerings and driving traffic to its resorts. Factors contributing to its earnings include the overall growth of the tourism sector in Macau, the expansion of its resort facilities, and its ability to attract high-value customers through premium services and amenities.
Melco Resorts & Entertainment Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive operational and financial trajectory: strong full-year EBITDA growth, robust Macau recovery (including a 24% GGR uptick in early 2026), meaningful liquidity and active debt reduction, large-capex refurbishment plans (Countdown Hotel), and standout growth in Cyprus. Offsetting items included localized underperformance in the Philippines with strategic uncertainty at COD Manila, several event-driven and one-time cost pressures (bad debt, higher OpEx from events), and a forthcoming trademark fee increase. Management framed many negatives as one-offs or manageable and emphasized disciplined cost control and margin focus, supporting continued optimism.Q4-2025 Updates
Positive Updates
Full-Year Group Property EBITDA Growth
Recorded $1.4 billion in group property EBITDA for FY2025, up 17% year over year versus 2024, indicating strong recovery and margin expansion.
Macau EBITDA and Market Momentum
Macau property EBITDA grew 24% year over year in Q4 and 25% for the full year 2025; Macau market GGR was up 24% year over year at the start of 2026 and the company reports increasing market share so far in 2026.
Adjusted Property EBITDA and Win-Rate Tailwinds
Group-wide adjusted property EBITDA for 2025 increased ~12% year over year to approximately $331 million (or ~$323 million adjusted for VIP hold). Favorable win rates at City of Dreams Macau and City of Dreams Manila positively impacted EBITDA by roughly $7 million and $3 million, respectively.
Strong Liquidity and Debt Reduction
Available liquidity of approximately $2.4 billion and consolidated cash on hand of about $1.2 billion as of 2025; the group paid down roughly $400 million of debt in 2025 and continued repayments in 2026 (e.g., $35 million repaid in January and $25 million planned), with no material maturities in 2026.
Cyprus Performance
City of Dreams Mediterranean and satellite casinos in Cyprus delivered 78% year-over-year growth in property EBITDA, reaching $21 million for 2025, demonstrating strong international momentum.
Capital Investment Program and Property Enhancements
Total CapEx for the year (including carry-forward) of $450 million; Macau CapEx ~ $375 million. Major projects include the Countdown Hotel renovation (~$100 million in 2026), retail revamp at City of Dreams Macau, and F&B upgrades to enhance product quality.
House of Dancing Water Driving Visitation and Non-Gaming Spend
Since reopening in May 2025, House of Dancing Water shows (1,800–1,900 attendees per show, two shows most days) have driven meaningful increases in property visitation and noticeable uplift in food & beverage and non-gaming spend, supporting broader property activation.
Margin Recovery Adjusted for One-Offs
Management noted that excluding event-driven costs (e.g., National Games, anniversary events) and House of Dancing Water, Macau OpEx was approximately $3.1 million per day in Q4 and Macau's property EBITDA margin would have been over 27% for 2025 on an actual basis.
Negative Updates
Philippines Operational Headwinds and Strategic Uncertainty
COD Manila faced continued competitive pressures and industry headwinds in 2025. Management concluded strategic alternatives but did not identify options that fully realize property value and stated they may reevaluate in the future, signaling ongoing uncertainty for that asset.
Event-Driven Operating Cost Increases
Macau operating expenses increased in Q4 due to one-off events (China National Games, Studio City 10th anniversary, Macau Grand Prix) and promotional activity; management estimates Macau daily OpEx excluding House of Dancing Water to rise to ~$3.2 million in 2026 due to increased marketing around Chinese New Year and brand campaigns.
Bad Debt and Settlement-Related Charges
EBITDA was impacted by additional bad debt provisions tied to a settlement with a former junket operator; additional bad debt was approximately $5 million for the quarter, a near-term drag though management expects normalization going forward.
Trademark License Fee Increase
The trademark license fee paid to Melco International was 1% of City of Dreams Macau gross revenues in 2025 (approx. $33 million) and will increase to up to 1.5% from 2026, representing a recurring increase in fees (no annual cap) even though 2025 fees were noted as lower than peers.
Limited Immediate Conversion from Entertainment to Gaming
While shows like House of Dancing Water materially increase visitation and non-gaming spend, management acknowledged that direct, immediate conversion of show attendees into gaming customers is limited; conversion benefits are more long-term and diffused.
Competitive Intensity in Macau
Management described competition in Macau as 'still very intense' and expects that level of competition to persist through the year; although they remain disciplined, intense competition could pressure near-term reinvestment and returns.
Company Guidance
Management provided detailed 2026 guidance and 2025 metrics: group property EBITDA for FY2025 was $1.4 billion (up 17% YoY) while group‑wide adjusted property EBITDA was ~ $331 million (up 12% YoY; ~$323 million adjusted for VIP hold), Macau property EBITDA grew 24% in Q4 and 25% for the year, City of Dreams Mediterranean and satellite casinos generated $21 million in 2025 (up 78% YoY), and favorable win rates contributed roughly $7 million (COD Macau) and $3 million (COD Manila) to EBITDA; event‑driven charges included ~ $5 million of bad debt and ~ $6 million for an anniversary event. Balance sheet and cash metrics: available liquidity ~ $2.4 billion, consolidated cash on hand ~ $1.2 billion (with ~ $550 million at Melco excluding certain operations), ~$400 million of debt paid down in 2025 (including redemption of $358 million of 2026 senior notes), $35 million repaid in January and a further ~$25 million planned this month, and no material 2026 maturities. CapEx guidance is ~$450 million for the year (Macau ~ $375 million, Manila $35–40 million, Cyprus $35–40 million) including ~ $100 million for the Countdown Hotel; Macau daily OpEx excluding House of Dancing Water is expected to be ~ $3.2 million/day in 2026 (Q4 pro forma ~ $3.1 million/day) and adjusted Macau EBITDA margin for 2025 would have been over 27% excluding event costs. Non‑operating guidance for 2026: depreciation & amortization ~$140–145 million, corporate expense ~$35 million, and consolidated net interest expense ~$115–120 million (including ~ $6 million finance liability interest and ~ $5 million finance lease interest); trademark fees were ~$33 million in 2025 (1% rate) and will increase to 1.5% in 2026.Melco Resorts & Entertainment Financial Statement Overview
Summary
Income statement is improving (higher revenue and better gross/EBITDA margins), but overall financial health is weighed down by a critically weak balance sheet (negative equity and high debt) and problematic cash flow visibility/sustainability (operating cash flow and free cash flow reported as zero). These factors materially increase solvency and liquidity risk.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 | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.16B | 4.64B | 3.78B | 1.35B | 2.01B |
| Gross Profit | 1.90B | 1.66B | 1.18B | 286.52M | 490.01M |
| EBITDA | 1.14B | 1.02B | 815.96M | -217.57M | -23.19M |
| Net Income | 185.04M | 43.54M | -326.92M | -930.53M | -811.75M |
Balance Sheet | |||||
| Total Assets | 7.60B | 7.99B | 8.34B | 9.30B | 8.88B |
| Cash, Cash Equivalents and Short-Term Investments | 1.02B | 1.15B | 1.31B | 1.81B | 1.65B |
| Total Debt | 7.02B | 7.46B | 7.77B | 8.71B | 7.04B |
| Total Liabilities | 8.50B | 8.93B | 9.18B | 9.62B | 8.06B |
| Stockholders Equity | -1.25B | -1.33B | -1.29B | -850.33M | 244.75M |
Cash Flow | |||||
| Free Cash Flow | 0.00 | 325.48M | 358.80M | -1.24B | -948.17M |
| Operating Cash Flow | 0.00 | 626.66M | 622.69M | -619.43M | -268.77M |
| Investing Cash Flow | 0.00 | -300.81M | -48.51M | -806.11M | -674.55M |
| Financing Cash Flow | 0.00 | -478.35M | -1.13B | 1.78B | 821.75M |
Melco Resorts & Entertainment Technical Analysis
Negative
5.83
Price Trends
6.81
Negative
7.69
Negative
7.90
Negative
Market Momentum
-0.28
Negative
41.26
Neutral
56.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MLCO, the sentiment is Negative. The current price of 5.83 is below the 20-day moving average (MA) of 6.04, below the 50-day MA of 6.81, and below the 200-day MA of 7.90, indicating a bearish trend. The MACD of -0.28 indicates Negative momentum. The RSI at 41.26 is Neutral, neither overbought nor oversold. The STOCH value of 56.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $6.94B | 21.02 | 88.84% | 3.22% | 4.69% | 15.18% | |
62 Neutral | $9.51B | 48.27 | 7.74% | ― | 0.05% | -94.07% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
56 Neutral | $39.54B | 25.06 | 72.73% | 1.51% | 8.37% | 10.20% | |
53 Neutral | $12.09B | 37.04 | ― | 0.80% | -0.26% | -44.45% | |
50 Neutral | $4.36B | -9.00 | -13.11% | ― | 0.87% | 31.28% | |
44 Neutral | $2.20B | 12.65 | ― | ― | 11.32% | ― |
* Consumer Cyclical Sector Average
MLCO
Melco Resorts & Entertainment
5.83
0.08
1.39%
LVS
Las Vegas Sands
55.72
11.53
26.09%
MGM
MGM Resorts
34.25
-2.12
-5.83%
WYNN
Wynn Resorts
114.87
25.16
28.04%
CZR
Caesars Entertainment
20.22
-14.82
-42.29%
RRR
Red Rock Resorts
60.53
12.21
25.26%
Melco Resorts & Entertainment Corporate Events
Melco Resorts Finance Releases Q3 2025 Financial Report
Nov 28, 2025
Melco Resorts Finance Limited released its quarterly report for the third quarter of 2025, detailing its financial performance through unaudited condensed consolidated financial statements. The report highlights the company’s strategic financial maneuvers, including the repayment and redemption of senior notes and adjustments to credit facilities, reflecting its ongoing efforts to manage debt and optimize financial operations. These actions are indicative of Melco’s strategic positioning in the competitive gaming and entertainment sector, aiming to enhance financial stability and investor confidence.
The most recent analyst rating on (MLCO) stock is a Hold with a $9.50 price target. To see the full list of analyst forecasts on Melco Resorts & Entertainment stock, see the MLCO Stock Forecast page.
Melco Resorts Reports Strong Q3 2025 Earnings Growth
Nov 7, 2025
Melco Resorts & Entertainment Limited reported its unaudited financial results for the third quarter of 2025, showing a significant increase in total operating revenues to US$1.31 billion, up 11% from the same period in 2024. This growth was driven by improved performance in both gaming and non-gaming operations. The company’s operating income rose to US$184.5 million, and net income attributable to Melco was US$74.7 million. Notably, properties in Macau and Cyprus showed strong growth, with Macau’s Property EBITDA improving by 21% year-over-year and Cyprus achieving its best quarter since opening. Strategic repositioning efforts, such as reallocating resources and closing certain operations, were also highlighted as part of Melco’s development strategy.
The most recent analyst rating on (MLCO) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Melco Resorts & Entertainment stock, see the MLCO Stock Forecast page.
Melco Resorts to Announce Q3 2025 Financial Results on November 6
Oct 30, 2025
Melco Resorts & Entertainment Limited announced that it will release its unaudited financial results for the third quarter of 2025 on November 6, 2025. The announcement includes a conference call scheduled for the same day, providing stakeholders with insights into the company’s financial performance. This release is significant as it provides an opportunity for investors and analysts to assess the company’s current financial health and strategic positioning within the competitive integrated resorts industry.
The most recent analyst rating on (MLCO) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Melco Resorts & Entertainment stock, see the MLCO Stock Forecast page.
Melco Resorts Finance Completes Major Note Redemption
Oct 27, 2025
On October 25, 2025, Melco Resorts Finance Limited, a subsidiary of Melco Resorts & Entertainment, redeemed US$357,940,000 of its 5.250% senior notes due 2026, which represented approximately 71.6% of the total principal amount initially listed. This strategic financial move resulted in the cancellation of all redeemed notes, leaving no outstanding notes, thereby potentially strengthening the company’s financial position and reducing its debt obligations.
The most recent analyst rating on (MLCO) stock is a Buy with a $11.80 price target. To see the full list of analyst forecasts on Melco Resorts & Entertainment stock, see the MLCO Stock Forecast page.
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.