Intrinsic value of Wynn Resorts - WYNN

Previous Close

$166.03

  Intrinsic Value

$324.79

stock screener

  Rating & Target

str. buy

+96%

Previous close

$166.03

 
Intrinsic value

$324.79

 
Up/down potential

+96%

 
Rating

str. buy

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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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
  41.20
  37.58
  34.32
  31.39
  28.75
  26.38
  24.24
  22.31
  20.58
  19.02
  17.62
  16.36
  15.22
  14.20
  13.28
  12.45
  11.71
  11.04
  10.43
  9.89
  9.40
  8.96
  8.56
  8.21
  7.89
  7.60
  7.34
  7.11
  6.89
  6.71
Revenue, $m
  4,466
  8,904
  12,250
  16,455
  21,620
  27,836
  35,178
  43,704
  53,456
  64,459
  76,722
  90,242
  105,006
  120,992
  138,175
  156,526
  176,019
  196,627
  218,329
  241,108
  264,954
  289,863
  315,837
  342,888
  371,034
  400,299
  430,717
  462,327
  495,176
  529,316
  564,807
Variable operating expenses, $m
 
  6,317
  8,686
  11,663
  15,320
  19,721
  24,919
  30,956
  37,861
  45,652
  54,334
  63,895
  74,348
  85,666
  97,832
  110,826
  124,627
  139,219
  154,584
  170,713
  187,597
  205,233
  223,623
  242,776
  262,705
  283,425
  304,962
  327,343
  350,601
  374,773
  399,902
Fixed operating expenses, $m
 
  809
  827
  845
  864
  883
  902
  922
  943
  963
  985
  1,006
  1,028
  1,051
  1,074
  1,098
  1,122
  1,147
  1,172
  1,198
  1,224
  1,251
  1,278
  1,306
  1,335
  1,365
  1,395
  1,425
  1,457
  1,489
  1,521
Total operating expenses, $m
  3,945
  7,126
  9,513
  12,508
  16,184
  20,604
  25,821
  31,878
  38,804
  46,615
  55,319
  64,901
  75,376
  86,717
  98,906
  111,924
  125,749
  140,366
  155,756
  171,911
  188,821
  206,484
  224,901
  244,082
  264,040
  284,790
  306,357
  328,768
  352,058
  376,262
  401,423
Operating income, $m
  522
  1,778
  2,737
  3,946
  5,436
  7,232
  9,356
  11,825
  14,652
  17,844
  21,403
  25,342
  29,630
  34,275
  39,268
  44,603
  50,270
  56,262
  62,573
  69,198
  76,134
  83,379
  90,936
  98,805
  106,994
  115,509
  124,360
  133,559
  143,118
  153,054
  163,383
EBITDA, $m
  927
  2,991
  4,401
  6,177
  8,363
  10,996
  14,110
  17,729
  21,871
  26,546
  31,758
  37,506
  43,785
  50,584
  57,894
  65,702
  73,997
  82,767
  92,004
  101,699
  111,850
  122,453
  133,510
  145,027
  157,010
  169,470
  182,421
  195,880
  209,868
  224,405
  239,519
Interest expense (income), $m
  265
  517
  685
  985
  1,362
  1,825
  2,382
  3,041
  3,805
  4,680
  5,666
  6,766
  7,978
  9,302
  10,735
  12,276
  13,922
  15,670
  17,517
  19,463
  21,506
  23,644
  25,878
  28,207
  30,632
  33,156
  35,780
  38,508
  41,342
  44,288
  47,349
Earnings before tax, $m
  311
  1,261
  2,052
  2,962
  4,074
  5,407
  6,974
  8,785
  10,847
  13,165
  15,737
  18,576
  21,652
  24,973
  28,533
  32,327
  36,348
  40,592
  45,056
  49,735
  54,628
  59,735
  65,058
  70,599
  76,362
  82,353
  88,580
  95,051
  101,776
  108,766
  116,034
Tax expense, $m
  9
  341
  554
  800
  1,100
  1,460
  1,883
  2,372
  2,929
  3,554
  4,249
  5,015
  5,846
  6,743
  7,704
  8,728
  9,814
  10,960
  12,165
  13,428
  14,750
  16,128
  17,566
  19,062
  20,618
  22,235
  23,917
  25,664
  27,479
  29,367
  31,329
Net income, $m
  242
  921
  1,498
  2,162
  2,974
  3,947
  5,091
  6,413
  7,918
  9,610
  11,488
  13,560
  15,806
  18,230
  20,829
  23,598
  26,534
  29,632
  32,891
  36,306
  39,878
  43,607
  47,492
  51,537
  55,744
  60,118
  64,663
  69,387
  74,296
  79,399
  84,705

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
  16,428
  22,602
  30,359
  39,889
  51,357
  64,903
  80,635
  98,628
  118,928
  141,554
  166,499
  193,738
  223,233
  254,935
  288,794
  324,758
  362,781
  402,821
  444,849
  488,845
  534,802
  582,726
  632,635
  684,564
  738,560
  794,681
  853,002
  913,608
  976,597
  1,042,079
Adjusted assets (=assets-cash), $m
  9,327
  16,428
  22,602
  30,359
  39,889
  51,357
  64,903
  80,635
  98,628
  118,928
  141,554
  166,499
  193,738
  223,233
  254,935
  288,794
  324,758
  362,781
  402,821
  444,849
  488,845
  534,802
  582,726
  632,635
  684,564
  738,560
  794,681
  853,002
  913,608
  976,597
  1,042,079
Revenue / Adjusted assets
  0.479
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
  0.542
Average production assets, $m
  7,981
  12,003
  16,513
  22,181
  29,144
  37,523
  47,419
  58,913
  72,059
  86,891
  103,422
  121,647
  141,548
  163,097
  186,260
  210,998
  237,274
  265,053
  294,308
  325,014
  357,158
  390,735
  425,749
  462,214
  500,154
  539,604
  580,607
  623,217
  667,497
  713,518
  761,359
Working capital, $m
  1,574
  -303
  -417
  -559
  -735
  -946
  -1,196
  -1,486
  -1,818
  -2,192
  -2,609
  -3,068
  -3,570
  -4,114
  -4,698
  -5,322
  -5,985
  -6,685
  -7,423
  -8,198
  -9,008
  -9,855
  -10,738
  -11,658
  -12,615
  -13,610
  -14,644
  -15,719
  -16,836
  -17,997
  -19,203
Total debt, $m
  10,125
  12,680
  18,237
  25,218
  33,795
  44,117
  56,308
  70,466
  86,660
  104,930
  125,294
  147,744
  172,259
  198,804
  227,336
  257,810
  290,177
  324,398
  360,434
  398,259
  437,856
  479,217
  522,348
  567,267
  614,003
  662,599
  713,108
  765,597
  820,142
  876,832
  935,766
Total liabilities, $m
  11,796
  14,785
  20,342
  27,323
  35,900
  46,222
  58,413
  72,571
  88,765
  107,036
  127,399
  149,849
  174,364
  200,909
  229,442
  259,915
  292,282
  326,503
  362,539
  400,365
  439,961
  481,322
  524,453
  569,372
  616,108
  664,704
  715,213
  767,702
  822,248
  878,938
  937,871
Total equity, $m
  158
  1,643
  2,260
  3,036
  3,989
  5,136
  6,490
  8,063
  9,863
  11,893
  14,155
  16,650
  19,374
  22,323
  25,494
  28,879
  32,476
  36,278
  40,282
  44,485
  48,885
  53,480
  58,273
  63,264
  68,456
  73,856
  79,468
  85,300
  91,361
  97,660
  104,208
Total liabilities and equity, $m
  11,954
  16,428
  22,602
  30,359
  39,889
  51,358
  64,903
  80,634
  98,628
  118,929
  141,554
  166,499
  193,738
  223,232
  254,936
  288,794
  324,758
  362,781
  402,821
  444,850
  488,846
  534,802
  582,726
  632,636
  684,564
  738,560
  794,681
  853,002
  913,609
  976,598
  1,042,079
Debt-to-equity ratio
  64.082
  7.720
  8.070
  8.310
  8.470
  8.590
  8.680
  8.740
  8.790
  8.820
  8.850
  8.870
  8.890
  8.910
  8.920
  8.930
  8.940
  8.940
  8.950
  8.950
  8.960
  8.960
  8.960
  8.970
  8.970
  8.970
  8.970
  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
  921
  1,498
  2,162
  2,974
  3,947
  5,091
  6,413
  7,918
  9,610
  11,488
  13,560
  15,806
  18,230
  20,829
  23,598
  26,534
  29,632
  32,891
  36,306
  39,878
  43,607
  47,492
  51,537
  55,744
  60,118
  64,663
  69,387
  74,296
  79,399
  84,705
Depreciation, amort., depletion, $m
  405
  1,213
  1,664
  2,230
  2,927
  3,765
  4,754
  5,904
  7,218
  8,701
  10,355
  12,165
  14,155
  16,310
  18,626
  21,100
  23,727
  26,505
  29,431
  32,501
  35,716
  39,074
  42,575
  46,221
  50,015
  53,960
  58,061
  62,322
  66,750
  71,352
  76,136
Funds from operations, $m
  1,175
  2,133
  3,162
  4,392
  5,901
  7,712
  9,845
  12,317
  15,137
  18,312
  21,843
  25,725
  29,961
  34,540
  39,455
  44,698
  50,261
  56,138
  62,321
  68,808
  75,594
  82,680
  90,067
  97,758
  105,760
  114,078
  122,724
  131,709
  141,046
  150,751
  160,841
Change in working capital, $m
  204
  -88
  -114
  -143
  -176
  -211
  -250
  -290
  -332
  -374
  -417
  -460
  -502
  -544
  -584
  -624
  -663
  -701
  -738
  -774
  -811
  -847
  -883
  -920
  -957
  -995
  -1,034
  -1,075
  -1,117
  -1,161
  -1,207
Cash from operations, $m
  971
  2,222
  3,276
  4,535
  6,076
  7,923
  10,095
  12,606
  15,468
  18,686
  22,260
  26,185
  30,463
  35,083
  40,039
  45,322
  50,924
  56,838
  63,059
  69,582
  76,405
  83,527
  90,950
  98,678
  106,716
  115,073
  123,758
  132,784
  142,163
  151,912
  162,048
Maintenance CAPEX, $m
  0
  -850
  -1,200
  -1,651
  -2,218
  -2,914
  -3,752
  -4,742
  -5,891
  -7,206
  -8,689
  -10,342
  -12,165
  -14,155
  -16,310
  -18,626
  -21,100
  -23,727
  -26,505
  -29,431
  -32,501
  -35,716
  -39,074
  -42,575
  -46,221
  -50,015
  -53,960
  -58,061
  -62,322
  -66,750
  -71,352
New CAPEX, $m
  -1,226
  -3,505
  -4,511
  -5,668
  -6,963
  -8,379
  -9,897
  -11,494
  -13,146
  -14,832
  -16,531
  -18,225
  -19,901
  -21,549
  -23,162
  -24,738
  -26,276
  -27,780
  -29,254
  -30,706
  -32,144
  -33,577
  -35,014
  -36,465
  -37,940
  -39,450
  -41,003
  -42,610
  -44,280
  -46,021
  -47,842
Cash from investing activities, $m
  -1,288
  -4,355
  -5,711
  -7,319
  -9,181
  -11,293
  -13,649
  -16,236
  -19,037
  -22,038
  -25,220
  -28,567
  -32,066
  -35,704
  -39,472
  -43,364
  -47,376
  -51,507
  -55,759
  -60,137
  -64,645
  -69,293
  -74,088
  -79,040
  -84,161
  -89,465
  -94,963
  -100,671
  -106,602
  -112,771
  -119,194
Free cash flow, $m
  -317
  -2,133
  -2,435
  -2,784
  -3,104
  -3,370
  -3,554
  -3,629
  -3,569
  -3,352
  -2,960
  -2,383
  -1,603
  -621
  567
  1,958
  3,548
  5,331
  7,300
  9,445
  11,759
  14,235
  16,863
  19,638
  22,555
  25,608
  28,795
  32,113
  35,561
  39,141
  42,854
Issuance/(repayment) of debt, $m
  1,014
  3,114
  5,556
  6,982
  8,577
  10,322
  12,191
  14,158
  16,194
  18,270
  20,363
  22,450
  24,515
  26,545
  28,532
  30,473
  32,368
  34,220
  36,037
  37,825
  39,596
  41,361
  43,131
  44,919
  46,736
  48,596
  50,509
  52,489
  54,545
  56,690
  58,933
Issuance/(repurchase) of shares, $m
  -11
  754
  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
  3,868
  5,556
  6,982
  8,577
  10,322
  12,191
  14,158
  16,194
  18,270
  20,363
  22,450
  24,515
  26,545
  28,532
  30,473
  32,368
  34,220
  36,037
  37,825
  39,596
  41,361
  43,131
  44,919
  46,736
  48,596
  50,509
  52,489
  54,545
  56,690
  58,933
Total cash flow (excl. dividends), $m
  698
  1,736
  3,121
  4,198
  5,473
  6,951
  8,637
  10,529
  12,625
  14,918
  17,403
  20,068
  22,912
  25,924
  29,099
  32,431
  35,916
  39,552
  43,336
  47,270
  51,356
  55,596
  59,994
  64,557
  69,291
  74,204
  79,304
  84,602
  90,107
  95,831
  101,787
Retained Cash Flow (-), $m
  -270
  -1,675
  -617
  -776
  -953
  -1,147
  -1,355
  -1,573
  -1,799
  -2,030
  -2,263
  -2,494
  -2,724
  -2,949
  -3,170
  -3,386
  -3,596
  -3,802
  -4,004
  -4,203
  -4,400
  -4,596
  -4,792
  -4,991
  -5,193
  -5,400
  -5,612
  -5,832
  -6,061
  -6,299
  -6,548
Prev. year cash balance distribution, $m
 
  980
  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
 
  44
  62
  86
  115
  151
  195
  246
  306
  374
  451
  537
  632
  735
  847
  967
  1,096
  1,232
  1,376
  1,528
  1,688
  1,855
  2,029
  2,211
  2,400
  2,597
  2,802
  3,015
  3,236
  3,466
  3,705
Cash available for distribution, $m
 
  1,041
  2,504
  3,422
  4,520
  5,804
  7,282
  8,956
  10,826
  12,888
  15,140
  17,573
  20,188
  22,975
  25,929
  29,045
  32,320
  35,749
  39,332
  43,067
  46,956
  51,000
  55,202
  59,566
  64,098
  68,804
  73,692
  78,769
  84,046
  89,532
  95,239
Discount rate, %
 
  8.10
  8.51
  8.93
  9.38
  9.85
  10.34
  10.85
  11.40
  11.97
  12.57
  13.19
  13.85
  14.55
  15.27
  16.04
  16.84
  17.68
  18.57
  19.49
  20.47
  21.49
  22.57
  23.69
  24.88
  26.12
  27.43
  28.80
  30.24
  31.75
  33.34
PV of cash for distribution, $m
 
  963
  2,127
  2,648
  3,158
  3,629
  4,036
  4,353
  4,565
  4,660
  4,635
  4,496
  4,255
  3,931
  3,545
  3,120
  2,679
  2,245
  1,834
  1,461
  1,133
  855
  628
  448
  310
  208
  135
  85
  51
  30
  17
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 69.8
Price to Sales 3.8
Price to Book 107
Price to Tangible Book
Price to Cash Flow 17.4
Price to Free Cash Flow -66.3
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 $6306 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 41.2% 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 8.1%, 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 71%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $792 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 5.4% 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 0.7%.

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 134.8%.

Life of production assets of 10 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 -3.4%. 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 - $948 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 102 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 $16.9 billion.

RELATED COMPANIES Price Int.Val. Rating
LVS Las Vegas Sand 74.08 101.40  buy
MGM MGM Resorts In 31.12 29.48  hold
MCRI Monarch Casino 47.67 8.13  str.sell
RRR Red Rock Resor 35.71 29.74  hold

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▶ [$$] Shareholders Rebuke Wynn Resorts on Executive Pay   [May-22-18 10:22PM  The Wall Street Journal]
▶ Final Trade: X, DE & More   [May-21-18 05:30PM  CNBC Videos]
▶ Elaine Wynn,¬†Shareholder Activist   [May-18-18 12:50PM  Bloomberg]
▶ Wynn completes $68 million pollution cleanup at casino site   [May-17-18 05:17PM  Associated Press]
▶ Wynn Resorts points to changes after founder's resignation   [May-16-18 07:00PM  Associated Press]
▶ Wynn Resorts female directors address policies after scandal   [May-15-18 06:24PM  Associated Press]
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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