Melco Resorts & Entertainment Ltd (MLCO) fell to a 52-week low of $4.55, extending a 51.64% decline over the past year, following a second-quarter report that undershot analyst expectations across key metrics.
The company reported diluted earnings per share of $0.02, well below the $0.09 consensus estimate. Revenue came in at $1.25 billion, also missing the $1.28 billion projection. Adjusted property EBITDA was approximately $304 million, though this rose to $312 million once favorable adjustments for VIP hold variance were accounted for.
Management cited three primary factors weighing on results: reduced visitor numbers, a softer hold rate, and an unfavorable VIP win rate at its City of Dreams Macau property, which dragged against property EBITDA by roughly $9 million.
On the balance sheet, Melco ended the quarter with $2.8 billion in total available liquidity, including $1 billion in cash. The company is trading at a low earnings multiple and, according to InvestingPro analysis, appears undervalued relative to its fair value assessment.
Looking ahead, Melco said it plans to open REM, a new luxury hotel and entertainment complex, after the October Golden Week holiday period.
