MELCO RESORTS & ENTERTAINMENT Faces Potential Threat of Influenza Outbreak in China
December 5, 2023
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MELCO RESORTS & ENTERTAINMENT ($NASDAQ:MLCO) is a leading casino and entertainment company in Macau, China. The company operates an extensive portfolio of properties which include City of Dreams, Studio City, Altira Macau, Mocha Clubs and Crown Towers. It also has investments in various businesses related to leisure, gaming and hospitality. The company is already experiencing a slowdown in revenue due to the trade war between China and United States. The company has implemented strict safety and health protocols in its casinos and other operations. These include regular health checks and temperature screenings for all employees.
In addition, the company has taken extra precautions such as providing masks to the patrons and sanitizing all surfaces regularly. The company’s recent investments in new properties and developments in Asia have been encouraging for investors. Moreover, the increasing popularity of Macau as a tourist destination could offset any shortfall from the flu outbreak. Therefore, investors are confident that MELCO RESORTS & ENTERTAINMENT will be able to weather this short-term challenge and continue its growth trajectory.
Share Price
On Monday, the stock opened at $7.0 and closed at $7.2, representing a 2.9% increase from the previous closing price of 7.0. This possible risk has created concerns about the company’s potential exposure to the virus and has raised questions about how the company can protect the safety of its customers and employees. The flu outbreak in China has already caused many people to become sick and has caused numerous deaths, raising concerns about how the virus might spread. It is also uncertain how the situation will develop in the future and whether the number of confirmed cases will continue to rise. This could have an impact on the operations of MELCO RESORTS & ENTERTAINMENT, as well as its reputation and customer base.
The company is taking steps to reduce the potential risks, such as introducing more stringent hygiene measures at its venues and providing health screening for staff and customers. It is also staying in close contact with public health authorities to ensure that it is following best practices for protecting customers and employees. By staying up to date with public health guidelines and ensuring that it is taking all necessary precautions, the company is in a good position to minimise any further disruptions. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for MLCO. More…
| Total Revenues | Net Income | Net Margin |
| 3.02k | -372.97 | -12.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for MLCO. More…
| Operations | Investing | Financing |
| -619.43 | -806.11 | 1.78k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for MLCO. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 8.71k | 9.37k | -2.57 |
Key Ratios Snapshot
Some of the financial key ratios for MLCO are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 4.4% | 27.2% | -0.5% |
| FCF Margin | ROE | ROA |
| -41.1% | 0.8% | -0.1% |
Analysis
GoodWhale’s analysis of MELCO RESORTS & ENTERTAINMENT’s wellbeing has revealed that the company is classified as a ‘cheetah’ on our Star Chart. This indicates that the company achieved high revenue or earnings growth, but is considered less stable due to lower profitability. We believe this type of company may be of interest to investors who are looking for companies that can offer rapid growth potential, but with some risk. When assessing MELCO RESORTS & ENTERTAINMENT’s overall financial wellbeing, our analysis showed that the company is strong in certain areas, such as asset liquidity, and medium in profitability. However, it is weak in areas such as dividend payment and growth outlook. Finally, considering its cash flows and debt, we have calculated that MELCO RESORTS & ENTERTAINMENT has an intermediate health score of 4/10. This suggests that the company is likely to be able to pay off its debt and fund future operations. More…
Peers
Each of these companies has its own unique strengths and strategies to stay ahead of the game, creating a dynamic and intense competition between them.
– Las Vegas Sands Corp ($NYSE:LVS)
Las Vegas Sands Corp is an American casino and resort company based in the US state of Nevada. It is the parent company of the Venetian Casino Resort and the Sands Expo and Convention Center, among other properties. The company has a market cap of 36.73B as of 2022, which is a reflection of its market presence and business performance. Additionally, its Return on Equity (ROE) stands at -11.56%, indicating that it is not performing well in terms of generating shareholder value. Las Vegas Sands Corp is a leader in the gaming and hospitality industry, and it continues to be a major player in Las Vegas, Macau, and other international markets.
– Wynn Resorts Ltd ($NASDAQ:WYNN)
Wynn Resorts Ltd is a global hospitality and entertainment company, operating integrated resorts in Las Vegas, Macau, and other parts of the world. As of 2022, the company has a market capitalization of 9.34 billion dollars and a return on equity of 27.93%. This suggests that the company is performing relatively well and is able to generate a healthy return on the capital it has invested. The company has positioned itself as an international leader in the hospitality and entertainment industry, with a focus on providing high-quality experiences for its guests. The strong financial performance of the company indicates that its strategies are working and that it is well-positioned for future growth.
– MGM Resorts International ($NYSE:MGM)
MGM Resorts International is a leading global hospitality and entertainment company, based in Las Vegas, Nevada. The company operates a portfolio of destination resort brands including Bellagio, MGM Grand, Mandalay Bay, The Mirage, Park MGM, and New York-New York. With a market cap of 12.88 billion USD as of 2022, the company’s stock has been performing well in the market with a Return on Equity (ROE) of 20.62%. This indicates a strong financial performance and suggests that the company is utilizing its equity to generate profits and add value to its shareholders.
Summary
MELCO RESORTS & ENTERTAINMENT (NASDAQ: MLCO) is a gaming and entertainment company with properties located in Macau, the Philippines, and other areas of Asia. In recent months, a spike in influenza infections in China has created a new headwind for the company, which could lead to a reduction in tourism and related gaming revenue. Investors should be aware of this potential risk when considering an investment in MELCO RESORTS & ENTERTAINMENT. Analysts have opined that due to the potential decrease in visitation and related gaming revenue, investors may want to consider other investments in the sector.
Additionally, any potential enforcement of new policies and regulations by the Chinese government could also have a negative effect on the company. Long-term investors may want to proceed cautiously when considering this stock.
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