Wynn Resorts (WYNN)

Luxury hotels and casino operator Wynn Resorts (NASDAQ:WYNN) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 8.3% year on year to $1.83 billion. Its non-GAAP profit of $0.86 per share was 25.4% below analysts’ consensus estimates.

Company Overview

Founded by the former Mirage Resorts CEO, Wynn Resorts (NASDAQ:WYNN) is a global developer and operator of high-end hotels and casinos, known for its luxurious properties and premium guest services.

Casino operators enjoy limited competition because gambling is a highly regulated industry. These companies can also enjoy healthy margins and profits. Have you ever heard the phrase ‘the house always wins’? Regulation cuts both ways, however, and casinos may face stroke-of-the-pen risk that suddenly limits what they can or can't do and where they can do it. Furthermore, digitization is changing the game, pun intended. Whether it’s online poker or sports betting on your smartphone, innovation is forcing these players to adapt to changing consumer preferences, such as being able to wager anywhere on demand.

Competitors in the luxury hotel and casino industry include MGM Resorts (NYSE:MGM), Las Vegas Sands (NYSE:LVS), and Caesars Entertainment (NASDAQ:CZR).

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Thankfully, Wynn Resorts’s 18.3% annualized revenue growth over the last five years was solid. Its growth beat the average consumer discretionary company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Wynn Resorts’s recent performance shows its demand has slowed as its annualized revenue growth of 11.7% over the last two years was below its five-year trend. Note that COVID hurt Wynn Resorts’s business in 2020 and part of 2021, and it bounced back in a big way thereafter.

We can dig further into the company’s revenue dynamics by analyzing its three most important segments: Casino, Hotel, and Dining and Entertainment, which are 29.6%, 1.2%, and 10.5% of revenue. Over the last two years, Wynn Resorts’s Casino revenue (Poker, slots) averaged 21% year-on-year growth while its Hotel (overnight bookings) and Dining and Entertainment (food, beverage, Wynn Interactive) revenues averaged declines of 5.2% and 1.4%.

This quarter, Wynn Resorts reported year-on-year revenue growth of 8.3%, and its $1.83 billion of revenue exceeded Wall Street’s estimates by 3.4%.

Looking ahead, sell-side analysts expect revenue to grow 2.4% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and indicates its products and services will see some demand headwinds.

Wynn Resorts’s operating margin has risen over the last 12 months and averaged 16.4% over the last two years. On top of that, its profitability was top-notch for a consumer discretionary business, showing it’s an well-run company with an efficient cost structure.

This quarter, Wynn Resorts generated an operating margin profit margin of 16.9%, up 9.1 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Wynn Resorts’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

In Q3, Wynn Resorts reported adjusted EPS of $0.86, down from $0.90 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects Wynn Resorts’s full-year EPS of $5.44 to shrink by 4.8%.

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

Wynn Resorts has shown decent cash profitability, giving it some flexibility to reinvest or return capital to investors. The company’s free cash flow margin averaged 12.5% over the last two years, slightly better than the broader consumer discretionary sector.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

Wynn Resorts historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 3.8%, lower than the typical cost of capital (how much it costs to raise money) for consumer discretionary companies.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, Wynn Resorts’s ROIC has increased. This is a good sign, but we recognize its lack of profitable growth during the COVID era was the primary reason for the change.

Wynn Resorts reported $1.49 billion of cash and $10.57 billion of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $1.9 billion of EBITDA over the last 12 months, we view Wynn Resorts’s 4.8× net-debt-to-EBITDA ratio as safe. We also see its $573.5 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was encouraging to see Wynn Resorts beat analysts’ revenue expectations this quarter. On the other hand, its Dining and Entertainment revenue missed and its Hotel revenue fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded up 1.2% to $124.01 immediately after reporting.

Updated: December 3, 2025 at 10:08 PM EST

When considering an investment in Wynn Resorts, investors should account for its valuation and business qualities as well as what’s happened in the latest quarter.

We see the value of companies helping consumers, but in the case of Wynn Resorts, we’re out. For starters, its revenue growth was weak over the last five years, and analysts expect its demand to deteriorate over the next 12 months. On top of that, Wynn Resorts’s projected EPS for the next year is lacking, and its relatively low ROIC suggests management has struggled to find compelling investment opportunities.

Wynn Resorts’s P/E ratio based on the next 12 months is 23.9x. This valuation multiple is fair, but we don’t have much confidence in the company. There are more exciting stocks to buy at the moment.

Wall Street analysts have a consensus one-year price target of $141.17 on the company (compared to the current share price of $130.59).