Melco Resorts & Entertainment Limited American Depositary Shares (MLCO)

FairStock Score: 75/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses with durable advantages and balance sheets that let them survive bad luck. Melco owns casino resorts in Macau, the Philippines, Cyprus, and elsewhere, but gaming is cyclical and heavily regulated. In fiscal Q2 2026, it reported revenue of $1.1B and net income of $29.5M, a thin 2.75% margin. That is not a wide-moat toll bridge; it is a capital-intensive, competitive operation. The provided growth figures show revenue declining while profit rebounded, so the improvement may be cost-driven rather than demand-driven. ROCE of 5.76% is modest. The Piotroski F-Score of 6/9 is decent, yet the Altman Z-Score of 0.02 warns of severe financial distress risk. At the 2026-10-13 close of $4.24, market cap is $2.3B, P/E is 7.19, EV/EBITDA is 6.33, and PEG is 0.07. Those look statistically cheap. But the Graham Number is only $0.36, producing a negative margin of safety of -1077.78%; by Graham's conservative arithmetic, the price is far above asset-based value. No dividend yield and missing P/B, ROE, and D/E data limit the view. The stock sits near the low end of its 52-week range of $4.06-$9.53, with a low beta of 0.48. I would call this a speculative low-multiple recovery, not a classic defensive value. Without sustained revenue growth and stronger balance-sheet visibility, the cheapness may be a warning rather than an opportunity.

In plain English: Melco runs casinos and resorts in Macau, the Philippines, Cyprus, and other places. In its latest fiscal Q2 2026, it earned a small profit on $1.1 billion of revenue, so the business is not very profitable right now. The stock price looks low compared with its earnings, but its finances carry big risk, so it is not a safe-looking bargain.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer