Intrinsic value of Wynn Resorts - WYNN

Previous Close

$144.91

  Intrinsic Value

$79.68

stock screener

  Rating & Target

sell

-45%

  Value-price divergence*

+122%

Previous close

$144.91

 
Intrinsic value

$79.68

 
Up/down potential

-45%

 
Rating

sell

 
Value-price divergence*

+122%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of WYNN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 14.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  9.57
  44.50
  40.55
  37.00
  33.80
  30.92
  28.32
  25.99
  23.89
  22.00
  20.30
  18.77
  17.40
  16.16
  15.04
  14.04
  13.13
  12.32
  11.59
  10.93
  10.34
  9.80
  9.32
  8.89
  8.50
  8.15
  7.84
  7.55
  7.30
  7.07
  6.86
Revenue, $m
  4,466
  6,453
  9,070
  12,426
  16,625
  21,765
  27,930
  35,189
  43,597
  53,190
  63,989
  76,001
  89,222
  103,637
  119,224
  135,958
  153,814
  172,762
  192,781
  213,850
  235,953
  259,082
  283,234
  308,413
  334,630
  361,905
  390,263
  419,736
  450,364
  482,192
  515,273
Variable operating expenses, $m
 
  5,608
  7,882
  10,798
  14,447
  18,914
  24,271
  30,579
  37,886
  46,222
  55,606
  66,045
  77,534
  90,060
  103,606
  118,148
  133,664
  150,131
  167,527
  185,836
  205,043
  225,142
  246,130
  268,011
  290,794
  314,496
  339,139
  364,751
  391,366
  419,025
  447,772
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  3,945
  5,608
  7,882
  10,798
  14,447
  18,914
  24,271
  30,579
  37,886
  46,222
  55,606
  66,045
  77,534
  90,060
  103,606
  118,148
  133,664
  150,131
  167,527
  185,836
  205,043
  225,142
  246,130
  268,011
  290,794
  314,496
  339,139
  364,751
  391,366
  419,025
  447,772
Operating income, $m
  522
  845
  1,188
  1,628
  2,178
  2,851
  3,659
  4,610
  5,711
  6,968
  8,383
  9,956
  11,688
  13,576
  15,618
  17,811
  20,150
  22,632
  25,254
  28,014
  30,910
  33,940
  37,104
  40,402
  43,837
  47,410
  51,124
  54,985
  58,998
  63,167
  67,501
EBITDA, $m
  927
  1,431
  2,011
  2,755
  3,686
  4,826
  6,192
  7,802
  9,666
  11,793
  14,187
  16,850
  19,781
  22,977
  26,433
  30,143
  34,102
  38,303
  42,742
  47,413
  52,313
  57,441
  62,796
  68,378
  74,191
  80,238
  86,525
  93,060
  99,851
  106,907
  114,242
Interest expense (income), $m
  265
  354
  366
  538
  759
  1,035
  1,373
  1,778
  2,256
  2,809
  3,439
  4,150
  4,939
  5,809
  6,757
  7,782
  8,882
  10,057
  11,303
  12,619
  14,005
  15,458
  16,979
  18,568
  20,223
  21,947
  23,741
  25,606
  27,544
  29,558
  31,651
Earnings before tax, $m
  311
  491
  822
  1,090
  1,419
  1,816
  2,286
  2,832
  3,456
  4,159
  4,943
  5,807
  6,749
  7,767
  8,861
  10,029
  11,267
  12,575
  13,952
  15,395
  16,905
  18,481
  20,124
  21,835
  23,613
  25,462
  27,383
  29,379
  31,453
  33,609
  35,849
Tax expense, $m
  9
  133
  222
  294
  383
  490
  617
  765
  933
  1,123
  1,335
  1,568
  1,822
  2,097
  2,393
  2,708
  3,042
  3,395
  3,767
  4,157
  4,564
  4,990
  5,434
  5,895
  6,376
  6,875
  7,394
  7,932
  8,492
  9,074
  9,679
Net income, $m
  242
  358
  600
  796
  1,036
  1,326
  1,669
  2,067
  2,523
  3,036
  3,608
  4,239
  4,926
  5,670
  6,469
  7,321
  8,225
  9,180
  10,185
  11,238
  12,341
  13,491
  14,691
  15,939
  17,238
  18,587
  19,990
  21,447
  22,961
  24,534
  26,170

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,627
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  11,954
  13,473
  18,936
  25,941
  34,708
  45,438
  58,308
  73,464
  91,016
  111,043
  133,588
  158,666
  186,267
  216,360
  248,902
  283,838
  321,114
  360,673
  402,466
  446,451
  492,595
  540,881
  591,302
  643,868
  698,602
  755,543
  814,746
  876,276
  940,217
  1,006,665
  1,075,727
Adjusted assets (=assets-cash), $m
  9,327
  13,473
  18,936
  25,941
  34,708
  45,438
  58,308
  73,464
  91,016
  111,043
  133,588
  158,666
  186,267
  216,360
  248,902
  283,838
  321,114
  360,673
  402,466
  446,451
  492,595
  540,881
  591,302
  643,868
  698,602
  755,543
  814,746
  876,276
  940,217
  1,006,665
  1,075,727
Revenue / Adjusted assets
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
Average production assets, $m
  7,981
  11,532
  16,208
  22,205
  29,709
  38,894
  49,910
  62,883
  77,907
  95,050
  114,348
  135,814
  159,439
  185,198
  213,053
  242,958
  274,865
  308,727
  344,500
  382,150
  421,648
  462,979
  506,138
  551,133
  597,984
  646,725
  697,400
  750,069
  804,801
  861,678
  920,793
Working capital, $m
  1,574
  -1,523
  -2,141
  -2,932
  -3,924
  -5,137
  -6,591
  -8,305
  -10,289
  -12,553
  -15,101
  -17,936
  -21,056
  -24,458
  -28,137
  -32,086
  -36,300
  -40,772
  -45,496
  -50,469
  -55,685
  -61,143
  -66,843
  -72,785
  -78,973
  -85,410
  -92,102
  -99,058
  -106,286
  -113,797
  -121,604
Total debt, $m
  10,125
  10,454
  15,371
  21,676
  29,566
  39,223
  50,806
  64,446
  80,244
  98,268
  118,558
  141,129
  165,969
  193,053
  222,340
  253,783
  287,331
  322,935
  360,549
  400,135
  441,665
  485,122
  530,501
  577,810
  627,071
  678,318
  731,600
  786,978
  844,525
  904,327
  966,483
Total liabilities, $m
  11,796
  12,125
  17,042
  23,347
  31,237
  40,894
  52,477
  66,117
  81,915
  99,939
  120,229
  142,800
  167,640
  194,724
  224,011
  255,454
  289,002
  324,606
  362,220
  401,806
  443,336
  486,793
  532,172
  579,481
  628,742
  679,989
  733,271
  788,649
  846,196
  905,998
  968,154
Total equity, $m
  158
  1,347
  1,894
  2,594
  3,471
  4,544
  5,831
  7,346
  9,102
  11,104
  13,359
  15,867
  18,627
  21,636
  24,890
  28,384
  32,111
  36,067
  40,247
  44,645
  49,260
  54,088
  59,130
  64,387
  69,860
  75,554
  81,475
  87,628
  94,022
  100,666
  107,573
Total liabilities and equity, $m
  11,954
  13,472
  18,936
  25,941
  34,708
  45,438
  58,308
  73,463
  91,017
  111,043
  133,588
  158,667
  186,267
  216,360
  248,901
  283,838
  321,113
  360,673
  402,467
  446,451
  492,596
  540,881
  591,302
  643,868
  698,602
  755,543
  814,746
  876,277
  940,218
  1,006,664
  1,075,727
Debt-to-equity ratio
  64.082
  7.760
  8.120
  8.360
  8.520
  8.630
  8.710
  8.770
  8.820
  8.850
  8.870
  8.890
  8.910
  8.920
  8.930
  8.940
  8.950
  8.950
  8.960
  8.960
  8.970
  8.970
  8.970
  8.970
  8.980
  8.980
  8.980
  8.980
  8.980
  8.980
  8.980
Adjusted equity ratio
  -0.265
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  242
  358
  600
  796
  1,036
  1,326
  1,669
  2,067
  2,523
  3,036
  3,608
  4,239
  4,926
  5,670
  6,469
  7,321
  8,225
  9,180
  10,185
  11,238
  12,341
  13,491
  14,691
  15,939
  17,238
  18,587
  19,990
  21,447
  22,961
  24,534
  26,170
Depreciation, amort., depletion, $m
  405
  585
  823
  1,127
  1,508
  1,974
  2,534
  3,192
  3,955
  4,825
  5,804
  6,894
  8,093
  9,401
  10,815
  12,333
  13,953
  15,671
  17,487
  19,398
  21,403
  23,501
  25,692
  27,976
  30,355
  32,829
  35,401
  38,075
  40,853
  43,740
  46,741
Funds from operations, $m
  1,175
  944
  1,423
  1,923
  2,544
  3,300
  4,202
  5,259
  6,477
  7,861
  9,413
  11,133
  13,020
  15,071
  17,284
  19,654
  22,178
  24,851
  27,672
  30,637
  33,744
  36,993
  40,383
  43,916
  47,592
  51,416
  55,391
  59,522
  63,814
  68,274
  72,911
Change in working capital, $m
  204
  -469
  -618
  -792
  -991
  -1,213
  -1,455
  -1,713
  -1,984
  -2,264
  -2,549
  -2,835
  -3,120
  -3,402
  -3,679
  -3,949
  -4,214
  -4,472
  -4,724
  -4,972
  -5,216
  -5,458
  -5,700
  -5,942
  -6,187
  -6,437
  -6,692
  -6,956
  -7,228
  -7,511
  -7,807
Cash from operations, $m
  971
  1,413
  2,041
  2,715
  3,535
  4,513
  5,657
  6,972
  8,461
  10,125
  11,962
  13,968
  16,140
  18,473
  20,962
  23,603
  26,391
  29,323
  32,396
  35,609
  38,961
  42,451
  46,083
  49,858
  53,780
  57,853
  62,083
  66,477
  71,042
  75,786
  80,718
Maintenance CAPEX, $m
  0
  -405
  -585
  -823
  -1,127
  -1,508
  -1,974
  -2,534
  -3,192
  -3,955
  -4,825
  -5,804
  -6,894
  -8,093
  -9,401
  -10,815
  -12,333
  -13,953
  -15,671
  -17,487
  -19,398
  -21,403
  -23,501
  -25,692
  -27,976
  -30,355
  -32,829
  -35,401
  -38,075
  -40,853
  -43,740
New CAPEX, $m
  -1,226
  -3,551
  -4,676
  -5,996
  -7,504
  -9,185
  -11,016
  -12,973
  -15,024
  -17,142
  -19,298
  -21,466
  -23,626
  -25,759
  -27,855
  -29,905
  -31,907
  -33,862
  -35,774
  -37,650
  -39,498
  -41,331
  -43,159
  -44,995
  -46,851
  -48,740
  -50,675
  -52,669
  -54,732
  -56,877
  -59,115
Cash from investing activities, $m
  -1,288
  -3,956
  -5,261
  -6,819
  -8,631
  -10,693
  -12,990
  -15,507
  -18,216
  -21,097
  -24,123
  -27,270
  -30,520
  -33,852
  -37,256
  -40,720
  -44,240
  -47,815
  -51,445
  -55,137
  -58,896
  -62,734
  -66,660
  -70,687
  -74,827
  -79,095
  -83,504
  -88,070
  -92,807
  -97,730
  -102,855
Free cash flow, $m
  -317
  -2,543
  -3,221
  -4,104
  -5,096
  -6,180
  -7,334
  -8,534
  -9,755
  -10,972
  -12,161
  -13,303
  -14,380
  -15,379
  -16,293
  -17,117
  -17,848
  -18,491
  -19,049
  -19,528
  -19,936
  -20,283
  -20,578
  -20,829
  -21,048
  -21,242
  -21,421
  -21,592
  -21,764
  -21,944
  -22,138
Issuance/(repayment) of debt, $m
  1,014
  329
  4,917
  6,305
  7,890
  9,657
  11,583
  13,640
  15,797
  18,024
  20,291
  22,570
  24,841
  27,084
  29,287
  31,443
  33,548
  35,603
  37,614
  39,586
  41,530
  43,457
  45,379
  47,309
  49,261
  51,247
  53,282
  55,378
  57,547
  59,803
  62,156
Issuance/(repurchase) of shares, $m
  -11
  3,458
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,017
  3,787
  4,917
  6,305
  7,890
  9,657
  11,583
  13,640
  15,797
  18,024
  20,291
  22,570
  24,841
  27,084
  29,287
  31,443
  33,548
  35,603
  37,614
  39,586
  41,530
  43,457
  45,379
  47,309
  49,261
  51,247
  53,282
  55,378
  57,547
  59,803
  62,156
Total cash flow (excl. dividends), $m
  698
  1,244
  1,696
  2,200
  2,794
  3,478
  4,249
  5,106
  6,042
  7,052
  8,129
  9,268
  10,461
  11,705
  12,994
  14,326
  15,700
  17,112
  18,565
  20,058
  21,594
  23,174
  24,801
  26,480
  28,213
  30,005
  31,861
  33,785
  35,783
  37,859
  40,018
Retained Cash Flow (-), $m
  -270
  -3,816
  -546
  -701
  -877
  -1,073
  -1,287
  -1,516
  -1,755
  -2,003
  -2,255
  -2,508
  -2,760
  -3,009
  -3,254
  -3,494
  -3,728
  -3,956
  -4,179
  -4,398
  -4,614
  -4,829
  -5,042
  -5,257
  -5,473
  -5,694
  -5,920
  -6,153
  -6,394
  -6,645
  -6,906
Prev. year cash balance distribution, $m
 
  2,627
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  54
  1,149
  1,500
  1,917
  2,405
  2,962
  3,590
  4,287
  5,049
  5,875
  6,760
  7,701
  8,695
  9,740
  10,833
  11,972
  13,157
  14,386
  15,660
  16,979
  18,345
  19,759
  21,223
  22,740
  24,311
  25,941
  27,632
  29,388
  31,214
  33,112
Discount rate, %
 
  11.20
  11.76
  12.35
  12.97
  13.61
  14.29
  15.01
  15.76
  16.55
  17.37
  18.24
  19.16
  20.11
  21.12
  22.18
  23.28
  24.45
  25.67
  26.95
  28.30
  29.72
  31.20
  32.76
  34.40
  36.12
  37.93
  39.82
  41.81
  43.91
  46.10
PV of cash for distribution, $m
 
  49
  920
  1,058
  1,177
  1,270
  1,329
  1,349
  1,330
  1,273
  1,184
  1,070
  940
  803
  666
  537
  420
  319
  235
  168
  116
  78
  50
  31
  19
  11
  6
  3
  2
  1
  0
Current shareholders' claim on cash, %
  100
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Wynn Resorts, Limited (Wynn Resorts) is a developer, owner and operator of destination casino resorts that integrate accommodations and a range of amenities, including dining outlets, retail offerings, entertainment theaters and meeting complexes. The Company's segments include Macau Operations and Las Vegas Operations. The Company's Macau Operations include Wynn Macau and Wynn Palace. It also includes Encore, an expansion at Wynn Macau. The Company's Las Vegas Operations include Wynn Las Vegas and Encore, an expansion at Wynn Las Vegas. Wynn Las Vegas is located at the intersection of the Las Vegas Strip and Sands Avenue. As of December 31, 2016, it occupied approximately 215 acres of land fronting the Las Vegas Strip. As of December 31, 2016, the Company owned approximately 18 acres across Sands Avenue. The Company is constructing Wynn Boston Harbor, an integrated casino resort in Everett, Massachusetts.

FINANCIAL RATIOS  of  Wynn Resorts (WYNN)

Valuation Ratios
P/E Ratio 61
Price to Sales 3.3
Price to Book 93.4
Price to Tangible Book
Price to Cash Flow 15.2
Price to Free Cash Flow -57.9
Growth Rates
Sales Growth Rate 9.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -36.2%
Cap. Spend. - 3 Yr. Gr. Rate 19.3%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 6408.2%
Total Debt to Equity 6408.2%
Interest Coverage 2
Management Effectiveness
Return On Assets 4.5%
Ret/ On Assets - 3 Yr. Avg. 7.1%
Return On Total Capital 2.5%
Ret/ On T. Cap. - 3 Yr. Avg. 5.2%
Return On Equity 1052.2%
Return On Equity - 3 Yr. Avg. 30.5%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 37.9%
Gross Margin - 3 Yr. Avg. 38.2%
EBITDA Margin 22%
EBITDA Margin - 3 Yr. Avg. 24.3%
Operating Margin 11.7%
Oper. Margin - 3 Yr. Avg. 16%
Pre-Tax Margin 7%
Pre-Tax Margin - 3 Yr. Avg. 10.6%
Net Profit Margin 5.4%
Net Profit Margin - 3 Yr. Avg. 7.9%
Effective Tax Rate 2.9%
Eff/ Tax Rate - 3 Yr. Avg. 1.6%
Payout Ratio 134.3%

WYNN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WYNN stock intrinsic value calculation we used $4466 million for the last fiscal year's total revenue generated by Wynn Resorts. The default revenue input number comes from 2016 income statement of Wynn Resorts. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our WYNN stock valuation model: a) initial revenue growth rate of 44.5% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 11.2%, whose default value for WYNN is calculated based on our internal credit rating of Wynn Resorts, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Wynn Resorts.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of WYNN stock the variable cost ratio is equal to 86.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for WYNN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Wynn Resorts.

Corporate tax rate of 27% is the nominal tax rate for Wynn Resorts. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the WYNN stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for WYNN are equal to 178.7%.

Life of production assets of 19.7 years is the average useful life of capital assets used in Wynn Resorts operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for WYNN is equal to -23.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $158 million for Wynn Resorts - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 103.008 million for Wynn Resorts is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Wynn Resorts at the current share price and the inputted number of shares is $14.9 billion.

RELATED COMPANIES Price Int.Val. Rating
LVS Las Vegas Sand 63.57 48.86  hold
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MCRI Monarch Casino 37.06 23.71  sell
RRR Red Rock Resor 23.51 16.66  sell

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Financial statements of WYNN
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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