Earnings Beat: Melco Resorts & Entertainment Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Shareholders of Melco Resorts & Entertainment Limited (NASDAQ:MLCO) will be pleased this week, given that the stock price is up 14% to US$4.51 following its latest third-quarter results. Revenues of US$1.2b reported a marginal miss, falling short of forecasts by 5.6%, but earnings were better than expected - statutory profits came in at US$0.00009 per share, a nice change from the loss the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the most recent consensus for Melco Resorts & Entertainment from twelve analysts is for revenues of US$5.31b in 2027. If met, it would imply a reasonable 4.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 28% to US$0.54. Before this earnings report, the analysts had been forecasting revenues of US$5.35b and earnings per share (EPS) of US$0.54 in 2027. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

Check out our latest analysis for Melco Resorts & Entertainment

There were no changes to revenue or earnings estimates or the price target of US$6.08, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Melco Resorts & Entertainment analyst has a price target of US$8.50 per share, while the most pessimistic values it at US$4.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Melco Resorts & Entertainment's revenue growth is expected to slow, with the forecast 3.6% annualised growth rate until the end of 2027 being well below the historical 25% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.1% annually. Factoring in the forecast slowdown in growth, it seems obvious that Melco Resorts & Entertainment is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Melco Resorts & Entertainment's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Melco Resorts & Entertainment going out to 2028, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Melco Resorts & Entertainment (2 are significant!) that you need to be mindful of.

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