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Melco Resorts & Entertainment (MLCO)
NASDAQ:MLCO
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Melco Resorts & Entertainment
(NASDAQ:MLCO)
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Rating:58Neutral
Price Target:
$10.00
▲(4.82% Upside)
Melco Resorts & Entertainment's stock score is primarily driven by strong technical momentum and positive earnings call sentiment. However, significant financial challenges, including high leverage and liquidity constraints, weigh heavily on the overall score. The high P/E ratio further limits upside potential unless earnings growth improves.
Positive Factors
Strong Macau Performance
The significant growth in Macau's EBITDA and record gaming revenues indicate robust market demand and operational efficiency, strengthening Melco's market position in a key region.
Launch of City of Dreams Sri Lanka
The expansion into South Asia with a new resort taps into the growing premium Indian market, diversifying revenue streams and enhancing long-term growth prospects.
Robust Liquidity Position
Strong liquidity provides financial flexibility to manage debt, invest in growth opportunities, and weather economic uncertainties, supporting long-term stability.
Negative Factors
Negative Stockholders' Equity
Negative equity indicates financial instability, limiting Melco's ability to raise capital and posing risks to long-term solvency and operational sustainability.
Liquidity Constraints
Inadequate cash generation and liquidity constraints hinder Melco's ability to fund operations and capital projects, impacting future growth and financial health.
High Leverage
High leverage increases financial risk, with potential impacts on cash flow and financial flexibility, challenging Melco's long-term financial stability.
Melco Resorts & Entertainment (MLCO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.73B
Dividend YieldN/A
Average Volume (3M)2.73M
Price to Earnings (P/E)70.1
Beta (1Y)0.92
Revenue Growth12.22%
EPS GrowthN/A
CountryUS
Employees21,784
SectorConsumer Cyclical
Sector Strength84
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)0.04
Shares Outstanding390,407,200
10 Day Avg. Volume2,381,654
30 Day Avg. Volume2,730,893
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 Cap2.56
Enterprise Value/Revenue2.01
Enterprise Value/Gross Profit5.99
Enterprise Value/Ebitda9.24
Forecast
1Y Price Target
$11.08Price Target Upside16.14% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
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 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
Neutral
9.54
Price Trends
9.21
Positive
7.98
Positive
6.80
Positive
Market Momentum
0.11
Positive
51.81
Neutral
26.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MLCO, the sentiment is Neutral. The current price of 9.54 is below the 20-day moving average (MA) of 9.76, above the 50-day MA of 9.21, and above the 200-day MA of 6.80, indicating a neutral trend. The MACD of 0.11 indicates Positive momentum. The RSI at 51.81 is Neutral, neither overbought nor oversold. The STOCH value of 26.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 | 6.77B | 13.11 | 40.43% | 0.84% | 6.40% | 26.09% | |
68 Neutral | 13.09B | 37.62 | -86.94% | 0.79% | -1.94% | -53.90% | |
61 Neutral | 9.40B | 19.04 | 18.14% | ― | 0.89% | -31.56% | |
59 Neutral | 36.38B | 26.80 | 70.92% | 1.79% | 1.62% | -7.14% | |
58 Neutral | $3.73B | 70.11 | 25.40% | ― | 12.22% | ― | |
55 Neutral | 5.48B | -28.48 | -5.01% | ― | -0.15% | 28.05% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
Performance Comparison
MLCO
Melco Resorts & Entertainment
9.54
1.97
26.02%
LVS
Las Vegas Sands
52.99
5.60
11.82%
MGM
MGM Resorts
34.55
-3.76
-9.81%
WYNN
Wynn Resorts
125.92
35.82
39.76%
CZR
Caesars Entertainment
26.34
-14.74
-35.88%
RRR
Red Rock Resorts
61.00
8.84
16.95%
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.