Is Wynn Resorts (WYNN) Undervalued Or Is Its Al Marjan Upside Already Priced In?

Recent share performance and business mix for Wynn Resorts

Wynn Resorts (WYNN) has drawn investor attention after a mixed stretch for the stock, including a decline in year to date return alongside modest gains over the past month and past 3 months.

The company operates large scale integrated resorts across four segments, with annual revenue of about US$7.3b and net income of roughly US$375 million. These figures give investors a snapshot of current business scale.

Las Vegas contributes approximately US$2.6b of revenue, while Wynn Palace and Wynn Macau add about US$2.4b and US$1.4b respectively. Encore Boston Harbor generates around US$843 million, rounding out the resort portfolio.

Recent annual revenue growth of about 5% and net income growth of roughly 18% provide context for how the underlying business has been evolving, even as the share price has declined about 19% year to date and about 7% over the past year.

See our latest analysis for Wynn Resorts.

At a share price of US$99.31, Wynn Resorts has seen short term momentum stabilise with a 7 day share price return of 2.47% and 30 day share price return of 3.55%. Longer term performance remains subdued, with the 1 year total shareholder return down 7.14% and the 3 year total shareholder return down 1.68%.

If Wynn Resorts has you reassessing your watchlist, this is a useful moment to broaden your search with the 18 top founder-led companies

Wynn Resorts trades at a sizeable discount to both intrinsic value estimates and analyst targets after a weak year to date share price. Is this caution a sensible read on risk, or an indication that pricing has overshot?

Most Popular Narrative: 26.9% Undervalued

Against the last close of $99.31, the most followed narrative pegs Wynn Resorts at a fair value of about $135.89, using a detailed cash flow and earnings roadmap.

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.

Read the complete narrative.

Curious what sits behind that fair value gap? The narrative focuses on measured revenue growth, firmer margins, and a rich future earnings multiple. The exact mix may surprise you.

Result: Fair Value of $135.89 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the Wynn Resorts story also carries real risk, particularly if Macau underperforms or large capital projects like Al Marjan fail to earn their keep.

Find out about the key risks to this Wynn Resorts narrative.

Another View on Wynn Resorts Valuation

The earlier narrative leans on forward earnings and price targets to argue Wynn Resorts looks undervalued. A second lens uses its current P/E of 27.1x, which sits above the US Hospitality average of 25.3x yet matches the estimated fair ratio of 27.1x. That mix of relative expensiveness and fair ratio alignment raises a simple question. Is the market already pricing in much of the upside that analysts expect?

For investors comparing these signals, it can help to see how today’s P/E stacks up against both peers and the fair ratio over time, then decide what kind of valuation risk feels acceptable. See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With sentiment on Wynn Resorts clearly mixed, this is a good time to look through the underlying numbers yourself and decide what stands out most. To weigh both the upside and the concerns side by side, review the 3 key rewards and 2 important warning signs

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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.

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