Luxury hotels and casino operator Wynn Resorts (NASDAQ: WYNN) missed Wall Street’s revenue expectations in Q1 CY2025, with sales falling 8.7% year on year to $1.7 billion. Its non-GAAP profit of $1.07 per share was 14% below analysts’ consensus estimates.
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Wynn Resorts (WYNN) Q1 CY2025 Highlights:
- Revenue: $1.7 billion vs analyst estimates of $1.73 billion (8.7% year-on-year decline, 1.8% miss)
- Adjusted EPS: $1.07 vs analyst expectations of $1.24 (14% miss)
- Adjusted EBITDA: $425.3 million vs analyst estimates of $572.8 million (25% margin, 25.7% miss)
- Operating Margin: 15.8%, down from 19.5% in the same quarter last year
- Market Capitalization: $8.81 billion
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.
Sales Growth
A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Wynn Resorts grew its sales at a sluggish 3.3% compounded annual growth rate. This was below our standard for the consumer discretionary sector and is a poor baseline for our analysis.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Wynn Resorts’s annualized revenue growth of 28.4% over the last two years is above its five-year trend, suggesting its demand recently accelerated. 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 61.2%, 16.1%, and 14.7% of revenue. Over the last two years, Wynn Resorts’s revenues in all three segments increased. Its Casino revenue (Poker, slots) averaged year-on-year growth of 66.8% while its Hotel (overnight bookings) and Dining and Entertainment (food, beverage, Wynn Interactive) revenues averaged 17.4% and 2.9%.
This quarter, Wynn Resorts missed Wall Street’s estimates and reported a rather uninspiring 8.7% year-on-year revenue decline, generating $1.7 billion of revenue.
Looking ahead, sell-side analysts expect revenue to grow 1.7% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will face some demand challenges.
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Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
Wynn Resorts’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 14.9% over the last two years. This profitability was solid for a consumer discretionary business and shows it’s an efficient company that manages its expenses well.
In Q1, Wynn Resorts generated an operating profit margin of 15.8%, down 3.7 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
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 Q1, Wynn Resorts reported EPS at $1.07, down from $1.59 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects Wynn Resorts’s full-year EPS of $5.51 to shrink by 10.1%.
Key Takeaways from Wynn Resorts’s Q1 Results
We struggled to find many positives in these results as its revenue, EPS, and EBITDA fell short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 1.8% to $82.01 immediately after reporting.
The latest quarter from Wynn Resorts’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
