WYNN 84.6 (-1.43%)
US9831341071Travel & LeisureResorts & Casinos

Last update on 2024-06-07

Wynn Resorts (WYNN) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

Comprehensive Piotroski F-Score analysis of Wynn Resorts (WYNN) for 2023, reflecting financial strength (score: 8/9). Key insights on profitability, liquidity, and efficiency.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 8

We're running Wynn Resorts (WYNN) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
1
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
1
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
1
Current Ratio is growing?
0
Number of shares not diluted?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

The Piotroski F-Score ranges from 0 to 9 and measures a company's financial strength using nine criteria related to profitability, liquidity, and operating efficiency. Wynn Resorts (WYNN) was evaluated with a Piotroski Score of 8, based on positive results in various areas such as net income, cash flow from operations, return on assets, and asset turnover ratio. The company has become profitable again in 2023, showing significant recovery post-pandemic. However, some concerns were noted, including increased leverage and a decreasing current ratio.

Insights for Value Investors Seeking Stable Income

With a high Piotroski Score of 8, Wynn Resorts demonstrates strong financial health and recovery, making it a worthwhile consideration for investment. However, potential investors should remain cautious due to the company's higher leverage and decreasing liquidity. A closer look at these aspects and comparison with peers may provide a more comprehensive investment decision.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Wynn Resorts (WYNN)

Company has a positive net income?

The criterion examines whether the company's net income is positive, reflecting its profitability.

Historical Net Income of Wynn Resorts (WYNN)

In 2023, Wynn Resorts reported a net income of $729,994,000, which is a positive figure. This indicates that the company has returned to profitability after experiencing net losses in 2020 and 2021 of over $2 billion and $755 million, respectively. Wynn has shown resilience and a robust recovery through its operations, particularly post-COVID-19 pandemic, which had previously caused significant financial disruptions. Over the last 20 years, Wynn Resorts has shown varied performance, but a positive net income in 2023 is a strong indicator of financial health. This earns the company 1 point in the Piotroski analysis score, signaling improved profitability and potential value for shareholders.

Company has a positive cash flow?

Cash Flow from Operations (CFO) measures the cash generated by a company’s regular business activities. Positive CFO indicates healthy operational performance, which is vital for sustaining and growing a business.

Historical Operating Cash Flow of Wynn Resorts (WYNN)

The Cash Flow from Operations (CFO) for Wynn Resorts in 2023 is $1,247,879,000, which is positive. This is a good indicator as it signifies robust operational performance. Over the last 20 years, the cash flow has fluctuated, notably turning negative in 2020 and 2021, likely due to the impact of the COVID-19 pandemic. However, the positive CFO in 2023 suggests a promising recovery trajectory, thereby adding 1 point in the Piotroski analysis for this criterion.

Return on Assets (ROA) are growing?

Compare the ROA between the two fiscal years to assess the improvement in asset profitability, important for evaluating operational efficiency and profitability.

Historical change in Return on Assets (ROA) of Wynn Resorts (WYNN)

In 2023, Wynn Resorts (WYNN) reported a Return on Assets (ROA) of 0.0533, a significant improvement from the -0.0327 ROA recorded in 2022. This increase of 8.6 percentage points strongly suggests improved asset utilization and profitability. Over the past 20 years, Wynn's ROA had been impacted notably by downturns, including a sharp drop in 2021. Comparatively, the industry's median ROA has ranged between 0.3909 and 0.4982. While Wynn's 2023 ROA is still below the industry median, the positive upward trend merits awarding 1 point under the Piotroski F-Score criterion, reflecting gains in operational efficiency and recovery.

Operating Cashflow are higher than Netincome?

Operating Cash Flow being higher than Net Income

Historical accruals of Wynn Resorts (WYNN)

Reviewing the operating cash flow and the net income figures for Wynn Resorts for the year 2023, we observe an operating cash flow of $1,247,879,000 and a net income of $729,994,000. The difference here is significant, with the operating cash flow exceeding the net income by $517,885,000. In this context, operating cash flow exceeding net income suggests that the company generates substantial cash from its primary business activities, indicating healthy cash generation and efficient operations. This situation is generally positive as it implies that the company is less reliant on accounting maneuvers to show profits, thus painting a more accurate picture of financial health. Over the past 20 years, it is noticed that the trend hasn't been consistent, with several years showing operating cash flows lower than net income, especially during hard economic times like 2020. For this specific criterion in 2023, Wynn Resorts gains 1 point.

Liquidity of Wynn Resorts (WYNN)

Leverage is declining?

Change in Leverage measures the degree to which a company is using borrowed money (debt). It is important because high leverage can be risky, especially if the company cannot meet its debt obligations.

Historical leverage of Wynn Resorts (WYNN)

Wynn Resorts' leverage increased from 0.9046 in 2022 to 0.9828 in 2023. This means the company has taken on more debt relative to its equity. Historical data over the last 20 years shows leverage generally spiking during economic downturns or when the company is investing heavily in operations.

Current Ratio is growing?

The current ratio measures a company's ability to pay short-term obligations with its short-term assets. A higher current ratio indicates better liquidity.

Historical Current Ratio of Wynn Resorts (WYNN)

The current ratio for Wynn Resorts has decreased from 2.2245 in 2022 to 1.9276 in 2023, falling below the industrial median. This negative trend indicates a weakening liquidity position, affecting its ability to cover short-term liabilities efficiently. Historically, the company had much stronger ratios, but the current downward trend sets a worrisome stage moving forward. No points are added.

Number of shares not diluted?

The change in outstanding shares reflects a company's equity financing over time, which can dilute shareholder value.

Historical outstanding shares of Wynn Resorts (WYNN)

In 2023, Wynn Resorts' outstanding shares stood at 112.523 million, a decrease from 113.623 million in 2022. Consequently, this trend merits a score of 1 in the Piotroski analysis, indicating a favorable reduction in outstanding shares. A one-year decrease of approximately 1.1 million shares, or roughly 0.97%, is notable. Historical data additionally signifies that 2023 marked the first decrement in three years, underpinning a positive outlook.

Operating of Wynn Resorts (WYNN)

Cross Margin is growing?

The change in gross margin is a key indicator of a company's financial health. An increase in gross margin means the company is better at managing its production costs relative to its revenue, which can lead to improvements in profitability. For Wynn Resorts, comparing the gross margins of 2022 and 2023 gives an insight into operational efficiency and cost management.

Historical gross margin of Wynn Resorts (WYNN)

Wynn Resorts' gross margin increased from 0.3638 in 2022 to 0.4322 in 2023. This represents a significant improvement of approximately 18.80%. This upward trend in gross margin is a positive indicator, suggesting that Wynn Resorts has improved its efficiency in managing production costs relative to its revenue. Notably, Wynn Resorts' gross margin had been lower than the industry median, but the 2023 margin of 0.4322 is approaching the industry median of 0.4982. Historically, Wynn Resorts suffered drastic fluctuations in its gross margins, notably with a dramatic negative margin in 2003 and 2004, which had drastic drops to -45.2859 and -419.7179, respectively. This recovery and growth in recent years are signs of substantial operational improvements and resilience. Therefore, Wynn Resorts earns 1 point in the Piotroski score for the increase in its gross margin.

Asset Turnover Ratio is growing?

The Asset Turnover ratio provides insight into how efficiently a company uses its assets to generate sales. An increasing ratio is indicative of improved efficiency.

Historical asset turnover ratio of Wynn Resorts (WYNN)

Wynn Resorts experienced an increase in Asset Turnover from 0.2896 in 2022 to 0.4766 in 2023, signaling enhanced efficiency in asset utilization. Historically, the Asset Turnover displayed notable fluctuations, peaking at 0.7765 in 2011 and reaching its low in 2020 during the pandemic. The positive trend in 2023 represents a significant recovery from pandemic-induced lows and is a favorable indicator of operational improvement. Hence, this merits a score of 1 point.


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