Wynn Resorts (NASDAQ: WYNN) is going through a major transformation in its life, opening Wynn Palace in Macau, building Wynn Boston Harbor, and completing plans for an expansion in Las Vegas. And investors have to digest all of those changes when considering the stock's future.
Continue Reading Below
One of the best ways to peer into founder and CEO Steve Wynn's vision for his company is to listen to the Wynn Resorts conference calls. That's when Wynn discusses plans and often rants about challenges and opportunities for his company. Here are the highlights of what he said from the most recent earnings conference call, by way of a transcript from Seeking Alpha.
Macau market share is booming
Macau is the world's biggest gambling, market but Wynn Resorts has always been a fairly small player compared with Las Vegas Sands, Galaxy, and SJM, which have more than the one resort Wynn has. But the opening of Wynn Palace changed things, and Wynn has seen its market share increase rapidly.
What's impressive is that the market share is so high despite the construction going on around Wynn Palace. Once construction is complete, we could imagine an even higher market share approaching 20%. That's incredible with just two resorts in Macau.
Wynn Resorts' initial renderings of Paradise Park. Image source: Wynn Resorts.
The vision for Wynn Las Vegas
A lot of discussion on the conference call was around Wynn's plans for the golf course behind Wynn Las Vegas. This quote is putting in context how much (or how little) the golf course makes each year. It's not a financial driver at all, and Wynn's plans for Paradise Park should turn it into a money maker.
What Paradise Park will consist of
Paradise Park is likely to eventually be a massive addition for Wynn Resorts, including a new tower, lagoon, convention space, and much more. That master plan is in place, but not everything will be built right away. In fact, Wynn is going a new direction and focusing on convention customers first. That's not typically a big business for Wynn, but with a massive amount of land to build on, it could be an attractive option for the company.
The initial Paradise Park Plan
Tearing out the golf course will probably begin late this year, and Wynn said the construction of the lagoon and convention facilities would be relatively quick. And the return on investment is attractive, given the cash on hand and the company's low borrowing costs in today's market.
The initial cost for Paradise Park
By the end of 2018, we could see the completion of the initial phase of Paradise Park. The theory is that more convention business will bring more customers to the hotel and more people to restaurants and nightclubs. And with Wynn's history of successful developments in Las Vegas, I don't see a reason to doubt those projection. The lagoon alone could be an attractive draw for visitors to Las Vegasand make Wynn Las Vegas an even better destination than the golf course ever did.
10 stocks we like better than Wynn ResortsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Wynn Resorts wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of May 1, 2017