Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Wynn Resorts, Ltd. Plunged 15% on Thursday

By Travis Hoium – Nov 8, 2018 at 1:24PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Macau may be a drag on Wynn Resorts heading into 2019.

What happened

Shares of casino operator Wynn Resorts, Ltd. (WYNN 13.16%) fell as much as 14.7% in trading Thursday after the company reported third-quarter 2018 results. At 12:50 p.m. EST, shares were still trading 12.5% lower on the day.

So what

Revenue rose 10.2% to $1.71 billion in the quarter, topping estimates of $1.66 billion from analysts. Net income on a non-GAAP (generally accepted accounting principles) basis was $182.3 million, or $1.68 per share, falling short of estimates by a penny.

Wynn Palace in Macau

Image source: Wynn Resorts.

Earnings weren't terrible, but investors were focused on CEO Matt Maddox's comments that the high-end of Macau's gaming market was in a "slowdown." Macau is where a vast majority of Wynn's earnings come from, so a slowdown there could take a big bite out of results in coming quarters.

Now what

A slowdown in Macau wouldn't be good for investors, but it's important to keep in mind that this is still a highly profitable market for Wynn. Growth goes up and down periodically, and after a couple of strong years it isn't surprising to see the market slow down a bit. But that slowdown is enough to send a stock like Wynn lower today.

Travis Hoium owns shares of Wynn Resorts. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wynn Resorts, Limited Stock Quote
Wynn Resorts, Limited
$67.50 (13.16%) $7.85

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.