Wynn Resorts, Limited (WYNN)

FairStock Score: 35/100 — MIXED

Key Financials

Strengths

• Strong free cash flow generation of $414.5M demonstrates operational liquidity despite capital intensity
• Diversified geographic footprint across Macau, Las Vegas, and Boston reduces single-region dependency
• Luxury brand positioning in high-end gaming and hospitality attracts premium customers
• Latest quarter net income of $100M shows profitability maintenance in challenging environment

Concerns

• Dangerous Altman Z-Score of 0.62 signals elevated financial distress risk and solvency concerns
• Valuation is indefensible: 31.84 P/E and 46.59x EV/EBITDA for a cyclical, low-ROCE business
• ROCE of 5.48% is below cost of capital—management destroying shareholder value on deployments
• Macau represents significant exposure to Chinese regulatory risk and consumer spending volatility

AI Analysis

I'm examining Wynn Resorts with considerable skepticism. This is a cyclical business trading at a valuation that demands perfection—a P/E of 31.84 on a company that hasn't demonstrated sustainable earnings growth. The Altman Z-Score of 0.62 screams financial distress territory, well below the 1.81 safety threshold. That's concerning for a $10.7B enterprise. The EV/EBITDA multiple of 46.59x is extraordinarily expensive, suggesting the market is pricing in substantial future expansion that may never materialize. Look at the fundamentals: ROCE of just 5.48% tells me management isn't deploying capital efficiently—we're destroying shareholder value at this return level. The Piotroski F-Score of 5/9 is mediocre, indicating accounting quality and operational momentum aren't compelling. Yes, they generated $414.5M in free cash flow with a 2.9% yield, which is modest, and the latest quarter showed a 5.36% net margin—thin for a luxury business. The company faces structural headwinds: Macau's regulatory environment remains hostile, Las Vegas is highly competitive, and Boston Harbor is a relatively minor asset. Without a durable competitive moat or pricing power, I see a capital-intensive business whose future returns depend entirely on market cycles and Chinese consumer discretionary spending. At $102.73, I'm paying too much for too little certainty.

Bull Case

If China reopens aggressively post-COVID and high-roller spending rebounds, Wynn's luxury positioning generates exceptional cash flows that justify current valuations. Boston Harbor achieves profitability while Vegas operations stabilize, driving margin expansion to 8-10% and justifying 25x earnings multiples.

Bear Case

Persistent Macau regulatory headwinds, weakening Chinese consumer demand, and competitive saturation in Las Vegas compress margins further. The company's debt burden coupled with a deteriorating Z-Score forces refinancing at punitive rates, eroding shareholder value significantly.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer