Is Wynn Resorts (WYNN) Still Attractive After A 36% One Year Share Price Climb

• If you are wondering whether Wynn Resorts at around US$114 per share offers good value or not, this breakdown will help you see what the current price actually reflects.
• The stock is up 36.3% over the last year, even though it has seen a 3.0% decline over the past week, an 8.9% decline over the last month, and a 6.7% decline year to date. These moves can change how investors think about both its growth potential and its risks.
• Recent coverage of Wynn Resorts has focused on how the company is positioned within the broader consumer services and gaming space, including investor interest in large casino operators and their exposure to travel and leisure demand. These themes help frame why the share price has moved the way it has and set the backdrop for thinking about whether the current valuation still makes sense.
• Right now, Wynn Resorts scores a 4 out of 6 on our valuation checks. Below, we walk through what that means using different valuation approaches and also look at a more rounded way to think about value that ties everything together later in the article.

Wynn Resorts delivered 36.3% returns over the last year. See how this stacks up to the rest of the Hospitality industry.

Approach 1: Wynn Resorts Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model looks at the cash Wynn Resorts is expected to generate in the future and discounts those projected cash flows back to today, aiming to estimate what the business might be worth right now.

Wynn Resorts most recent twelve month free cash flow is about $842.2 million. Using a 2 Stage Free Cash Flow to Equity model, analyst inputs and extrapolated figures project annual free cash flow rising to around $1.83 billion by 2035. For context, Simply Wall St uses analyst estimates where available, then extends the trend to build a ten year cash flow path in dollar terms.

Discounting that stream of projected cash flows results in an estimated intrinsic value of about $161.88 per share, compared with the current share price of roughly $114. On this DCF view, the stock comes out around 29.4% below the modelled value, which points to a meaningful valuation gap.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Wynn Resorts is undervalued by 29.4%. Track this in your watchlist or portfolio, or discover 871 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Wynn Resorts.

Approach 2: Wynn Resorts Price vs Earnings

For profitable companies, the P/E ratio is a useful shorthand because it tells you how many dollars you are paying for each dollar of current earnings. This is often where investors focus first.

What counts as a “normal” or “fair” P/E depends on how the market views a company’s growth prospects and risk profile. Higher expected growth or lower perceived risk can support a higher P/E, while slower growth or higher risk usually calls for a lower one.

Wynn Resorts currently trades on a P/E of about 23.34x. That is slightly above the Hospitality industry average of 21.89x and well below the peer group average of 58.56x. Simply Wall St’s Fair Ratio for Wynn Resorts is 21.37x. This is its proprietary estimate of what the P/E might be based on factors such as earnings growth, margins, size, industry and company specific risks.

The Fair Ratio can be more useful than a simple peer or industry comparison because it tries to adjust for differences in business quality and risk, rather than assuming all companies deserve the same multiple.

Since the current P/E of 23.34x sits above the Fair Ratio of 21.37x, the shares screen as slightly expensive on this measure.

Result: OVERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1442 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Wynn Resorts Narrative

Earlier we mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St help you connect your view of Wynn Resorts to the numbers by pairing a clear story about the business with a financial forecast. This links your assumptions about future revenue, earnings and margins to a Fair Value that you can compare with the current price, all within an easy Community page tool that updates as fresh news or earnings arrive and that can reflect very different perspectives, such as one investor focusing on UAE expansion and assigning a Fair Value around US$143.33 while another is more cautious and closer to the low analyst target of US$110.

Do you think there's more to the story for Wynn Resorts? Head over to our Community to see what others are saying!

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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