Melco Resorts & Entertainment (MLCO) AI Stock Analysis

• Market Cap: $3.07B
• Dividend Yield: N/A
• Average Volume (3M): 2.58M
• Price to Earnings (P/E): 57.7
• Beta (1Y): 0.91
• Revenue Growth: 12.22%
• EPS Growth: N/A
• Country: US
• Employees: 21,784
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Gambling, Resorts & Casinos
• EPS (TTM): 0.04
• Shares Outstanding: 390,407,200
• 10 Day Avg. Volume: 2,992,609
• 30 Day Avg. Volume: 2,582,932
• PEG Ratio: -0.14
• Price to Book (P/B): -0.63
• Price to Sales (P/S): 0.18
• P/FCF Ratio: 2.56
• Enterprise Value/Market Cap: 3.11
• Enterprise Value/Revenue: 1.94
• Enterprise Value/Gross Profit: 5.42
• Enterprise Value/Ebitda: 9.09
• 1Y Price Target: $10.41
• Price Target Upside: 37.88% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 47 Neutral
• Price Target: $8.00 ▲(5.96% Upside)

The overall stock score of 47 reflects significant financial challenges, including high leverage and liquidity issues, which overshadow operational improvements. While the earnings call highlights positive developments and strong liquidity, technical indicators suggest bearish momentum, and the valuation appears stretched.

Positive Factors

Strong Macau Performance

The robust growth in Macau's EBITDA and record gaming revenues highlight Melco's strong market position and operational efficiency in a key region.

Expansion in South Asia

The opening of City of Dreams Sri Lanka represents strategic geographic expansion, tapping into new markets and diversifying revenue streams.

Robust Liquidity Position

Strong liquidity provides financial flexibility for strategic investments and debt reduction, supporting long-term operational stability.

Negative Factors

High Leverage

High leverage can strain financial resources, limiting the company's ability to invest in growth opportunities and manage economic downturns.

Negative Equity

Negative equity indicates insolvency risks, which can undermine investor confidence and restrict access to capital markets.

Cash Flow Challenges

Inadequate cash generation limits the company's ability to fund operations and capital projects, posing a risk to long-term sustainability.

Melco Resorts & Entertainment Business Overview & Revenue Model

Company Description

Melco Resorts & Entertainment Limited is a leading developer and operator of integrated resorts in Asia, primarily focused on the gaming and hospitality sectors. The company operates several premium properties, including City of Dreams and Studio City in Macau, as well as City of Dreams Manila in the Philippines. Melco is dedicated to providing high-quality entertainment, gaming, and hospitality experiences, with a portfolio that includes hotels, casinos, restaurants, and retail outlets.

How the Company Makes Money

Melco Resorts & Entertainment generates revenue primarily through its casino operations, which include gaming tables, slot machines, and VIP gaming services. The company has a significant presence in the mass gaming segment, catering to both local and international tourists. Additionally, Melco earns revenue from its non-gaming segments, which encompass hotel accommodations, food and beverage services, retail sales, and entertainment offerings. The company's luxury resorts attract high-spending customers, and its focus on premium experiences enhances its profitability. Strategic partnerships with international brands and a commitment to quality service further bolster its revenue streams.

Melco Resorts & Entertainment Financial Statement Overview

Summary

Melco Resorts & Entertainment shows marginal improvement in revenue and operational profitability. However, the balance sheet reveals negative stockholders' equity and high leverage, while cash flow analysis indicates liquidity constraints. These financial challenges overshadow operational improvements.

Income Statement

Melco Resorts & Entertainment shows marginal improvement in its financial performance with a significant increase in total revenue from the previous year. The gross profit margin improved to 35.85% in 2024 from 31.36% in 2023. However, the net profit margin remains low at 0.94% in 2024, despite recovering from negative figures in previous years. The EBIT and EBITDA margins show positive trends, reaching 10.45% and 22.16% respectively in 2024, highlighting operational improvements. Overall, the company is on a path to recovery but still faces challenges in achieving sustainable profitability.

Balance Sheet

The balance sheet reveals a concerning scenario with a negative stockholders' equity of -$1.33 billion in 2024, indicating insolvency. This results in a negative equity ratio, which is a critical red flag. Moreover, the debt-to-equity ratio cannot be calculated due to negative equity, but the high total debt of $7.46 billion suggests potential leverage risks. Return on equity cannot be assessed due to negative equity. The company's financial stability is a major concern, overshadowing the improvements in operational metrics.

Cash Flow

Cash flow analysis indicates significant issues with operational sustainability. In 2024, operating cash flow, capital expenditure, and free cash flow are reported as zero, making it challenging to assess cash flow efficiency. The absence of positive free cash flow and operating cash flow growth in recent years suggests liquidity constraints and inadequate cash generation to cover operational and capital expenses. This highlights the need for better cash flow management to support ongoing business operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.93B	4.64B	3.78B	1.35B	2.01B	1.73B
Gross Profit	1.76B	1.66B	1.18B	286.52M	520.58M	189.52M
EBITDA	1.05B	1.03B	815.96M	-217.57M	6.04M	-300.03M
Net Income	56.71M	43.54M	-326.92M	-930.53M	-811.75M	-1.26B
Balance Sheet
Total Assets	7.81B	7.99B	8.34B	9.30B	8.88B	9.02B
Cash, Cash Equivalents and Short-Term Investments	1.12B	1.15B	1.31B	1.81B	1.65B	1.76B
Total Debt	7.46B	7.46B	7.77B	8.71B	7.04B	6.10B
Total Liabilities	8.89B	8.93B	9.18B	9.62B	8.06B	7.18B
Stockholders Equity	-1.43B	-1.33B	-1.29B	-850.33M	244.75M	1.10B
Cash Flow
Free Cash Flow	0.00	325.48M	358.80M	-1.24B	-948.17M	-1.32B
Operating Cash Flow	0.00	626.66M	622.69M	-619.43M	-268.77M	-860.96M
Investing Cash Flow	0.00	-300.81M	-48.51M	-806.11M	-674.55M	-53.31M
Financing Cash Flow	0.00	-478.35M	-1.13B	1.78B	821.75M	1.26B

Melco Resorts & Entertainment Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.55
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MLCO, the sentiment is Negative. The current price of 7.55 is below the 20-day moving average (MA) of 9.04, below the 50-day MA of 9.19, and above the 200-day MA of 6.94, indicating a neutral trend. The MACD of -0.39 indicates Positive momentum. The RSI at 24.20 is Positive, neither overbought nor oversold. The STOCH value of 6.31 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MLCO.

Melco Resorts & Entertainment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WYNN	68 Neutral	$12.47B	35.37	-51.73%	0.89%	-1.94%	-53.90%
RRR	66 Neutral	$5.88B	21.22	97.52%	3.59%	7.47%	2.58%
MGM	64 Neutral	$8.51B	17.24	17.34%	―	0.89%	-31.56%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
LVS	60 Neutral	$34.05B	25.05	49.16%	2.04%	1.62%	-7.14%
CZR	57 Neutral	$4.55B	―	-4.76%	―	-0.15%	28.05%
MLCO	47 Neutral	$3.07B	57.66	25.40%	―	12.22%	―

Melco Resorts & Entertainment Corporate Events

Melco Resorts Finance Completes Tender Offer for Senior Notes

On September 25, 2025, Melco Resorts Finance Limited announced the satisfaction of the financing condition for its conditional tender offer for its 5.250% senior notes due 2026. The tender offer, which expired on September 19, 2025, resulted in $142,060,000 of the notes being validly tendered, representing 28.41% of the total outstanding amount. The settlement for these notes occurred on September 24, 2025, with Melco Resorts Finance planning to cancel the purchased notes and potentially redeem the remaining outstanding notes that were not tendered.

Melco Resorts Finance Concludes Tender Offer for 2026 Notes

On September 22, 2025, Melco Resorts Finance Limited announced the results of its conditional cash tender offer for its outstanding 5.250% senior notes due 2026. The offer, which expired on September 19, 2025, saw US$142,060,000 worth of notes tendered. The company plans to purchase these notes at a consideration of US$1,000 per US$1,000 principal amount, with settlement expected on September 24, 2025. This financial maneuver is likely aimed at optimizing the company’s debt structure, potentially impacting its financial stability and market positioning.

Melco Resorts Finance Prices $500 Million Senior Notes Offering

On September 16, 2025, Melco Resorts Finance Limited, a subsidiary of Melco Resorts & Entertainment Limited, announced the pricing of a $500 million senior notes offering at 6.500% due in 2033. The proceeds from this offering will be used to fund a conditional cash tender offer for its outstanding 5.250% senior notes due 2026, cover related fees, and potentially redeem any remaining notes. This strategic financial move is intended to optimize the company’s debt structure and support its corporate objectives, reflecting its ongoing efforts to strengthen its financial positioning in the competitive gaming and entertainment sector.

Melco Resorts Finance Announces Senior Notes Offering and Tender Offer

On September 15, 2025, Melco Resorts Finance Limited, a subsidiary of Melco Resorts & Entertainment, announced a proposed international offering of senior notes and a conditional cash tender offer for its outstanding 5.250% senior notes due 2026. The new notes will rank equally with existing senior indebtedness, and the offering’s completion depends on market conditions and investor interest. The proceeds are intended to fund the tender offer and potentially redeem remaining outstanding notes. The tender offer is conditional on the successful completion of the new notes offering, with settlement expected by September 24, 2025.

Melco Resorts Finance Releases Q2 2025 Financial Report

Melco Resorts Finance Limited has released its unaudited condensed consolidated financial statements for the second quarter of 2025, covering the three and six months ending June 30, 2025. The report includes details on the company’s financial condition and operations, highlighting significant credit facilities and senior notes issued over recent years. This financial disclosure provides stakeholders with insights into the company’s fiscal health and strategic financial maneuvers, such as the amendment and restatement of credit facilities to extend maturities and adjust interest rates.

Melco Resorts Reports Strong Q2 2025 Results Amid New Openings

Melco Resorts & Entertainment reported its unaudited financial results for the second quarter of 2025, showing a 15% increase in total operating revenues to $1.33 billion compared to the same period in 2024. This growth was driven by improved performance in gaming and non-gaming operations, particularly at City of Dreams Macau and Studio City, which set new records in mass market table games revenue. Despite challenges in the Philippines and the Middle East, Melco remains optimistic about future growth, highlighted by the opening of City of Dreams Sri Lanka on August 1, 2025, marking the first integrated resort in Sri Lanka and South Asia.

Melco Resorts to Announce Q2 2025 Financial Results on July 31

On July 25, 2025, Melco Resorts & Entertainment Limited announced that it will release its unaudited financial results for the second quarter of 2025 on July 31, 2025. The announcement will be followed by a conference call on the same day. This release is significant as it provides stakeholders with insights into the company’s financial performance and strategic positioning in the competitive integrated resort industry.