Results: Melco Resorts & Entertainment Limited Beat Earnings Expectations And Analysts Now Have New Forecasts

A week ago, Melco Resorts & Entertainment Limited (NASDAQ:MLCO) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. The company beat forecasts, with revenue of US$1.3b, some 2.0% above estimates, and statutory earnings per share (EPS) coming in at US$0.19, 40% ahead of expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Melco Resorts & Entertainment after the latest results.

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Taking into account the latest results, the consensus forecast from Melco Resorts & Entertainment's 13 analysts is for revenues of US$5.28b in 2026. This reflects a modest 4.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 182% to US$0.75. In the lead-up to this report, the analysts had been modelling revenues of US$5.27b and earnings per share (EPS) of US$0.76 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

Check out our latest analysis for Melco Resorts & Entertainment

There were no changes to revenue or earnings estimates or the price target of US$10.85, suggesting that the company has met expectations in its recent result. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Melco Resorts & Entertainment analyst has a price target of US$13.20 per share, while the most pessimistic values it at US$8.50. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Melco Resorts & Entertainment's revenue growth is expected to slow, with the forecast 3.4% annualised growth rate until the end of 2026 being well below the historical 26% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 10% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Melco Resorts & Entertainment.

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The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$10.85, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Melco Resorts & Entertainment going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Melco Resorts & Entertainment that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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